EU Green Claims Directive: Parliament backs transparency law but elections could delay enforcement

13 Mar 2024 --- The European Parliament (EP) has voted in favor of the Green Claims Directive (GCD) that seeks to establish a verification and pre-approval system for environmental marketing claims to protect consumers. However, according to analysts, as this vote took place so close to the EU elections while the Council still has not published its position, it is unclear when inter-institutional negotiations will begin, which puts the GCD implementation at risk.

The EP adopted its first reading position with 467 votes to 65 and 74 abstentions yesterday. The file will now have to be followed up by the new EP after the European elections in June.

The directive would oblige companies to submit evidence about their environmental marketing claims before advertising products with terms like “biodegradable,” “less polluting,” “water saving,” or having “bio-based content.”

Key provisions of the directive include strict sanctions for non-compliance, ensuring that companies adhere to the prescribed guidelines or face severe penalties such as they could be temporarily excluded from public procurement tenders, lose their revenues and face fines of at least 4% of their annual turnover. 

Additionally, the directive addresses the issue of carbon neutrality claims, emphasizing the importance of transparency and accuracy in such assertions. 

Internal Market Committee rapporteur Andrus Ansip says: “Studies show that over 50% of environmental claims are vague, misleading or unfounded. We cannot speak about happy consumers if every other green claim is false.” 

“We cannot talk about a level playing field for our entrepreneurs while some traders are cheating. The GCD adopted today is balanced — it will bring clarity to our consumers and is less burdensome for traders than the claim-by-claim verification.”

Collective consumer protection
While the EP’s decision marks a significant milestone, further negotiations with the Council are required to finalize the directive. With EU elections looming, there is a pressing need to expedite inter-institutional discussions to prevent further delays.

“The text could be perfected, but it’s still a major step in the right direction. The main thing missing is clarity on which methods to use to substantiate claims, but there are guarantees to fix this later through Delegated Acts,” Margaux Le Gallou, programme manager at Environmental Coalition on Standards (ECOS), tells Packaging Insights.

“What we need right now is to finalize this law and adopt it as soon as possible. We regret the vote in EP is happening so late, leaving little room for trilogues to start before the EU elections, but we hope this law can still be adopted before the end of 2024.”

EU is cracking down on greenwashing to protect consumers against unverified environmental claims.GCD is complementary to the Empowering Consumers for the Green Transition Directive (ECGT), adopted earlier this year. 

“The classic way to distinguish them is ECGT forbids, and GCD explains how to do it right. GCD is about how to make good claims, while ECGT is about banning misleading practices. Without GCD, you only ban the worst practices. You give no rules on all the other claims to make them right,” explains Gallou.

On-pack messaging
A recent report from the financial think tank Planet Tracker identified six types of greenwashing: Greencrowding, greenlighting, greenshifting, greenlabeling, greenrinsing and greenhushing.

A spokesperson from the think tank tells us that “methodologies will be an essential part of the discussion — as of now, there are 230 active ecolabels in the EU, and 100 private green energy labels have been mapped in the EU. We understand penalties could be another area of discussion.”

Gallou at ECOS underlines that with GCD, claims will be more specific — one-word claims that can be misinterpreted will be harder to make. 

“There should also be space to add explanatory statements or a link to all the background information. We also expect there will be fewer claims because half of them are fraudulent (which is a good thing — we are not talking about ‘greenhushing’ but removing greenwashing).”

Furthermore, Nicole Romain, spokesperson for the EU Agency for Fundamental Rights (FRA), highlights its report on Enforcing consumer rights to combat greenwashing to say that more precise legislation at the EU level is needed to effectively address greenwashing and provide clear criteria for companies to follow when making green claims.

“The directive may affect labeling and on-pack messaging by requiring companies to provide clear, substantiated information about the environmental impact of their products. This could lead to changes in the way companies communicate their environmental credentials to consumers,” Romain tells us.

“Overall, the GCD represents a step toward combating greenwashing and empowering consumers to make informed decisions about the environmental impact of their purchases. The EU proposal, if adopted, would introduce a harmonized set of rules on how companies can substantiate green claims, with penalties for non-compliance.” The GCD file will now have to be followed up by the new Parliament after the European elections in June.

“Time is running out”
In response to potential ambiguity in defining “green” or “environmentally friendly” claims, the directive outlines specific rules to ensure claims are communicated clearly and comprehensively to consumers. Verifiers will play a crucial role in ensuring claims are well-documented and accurately communicated on packaging.

Efforts to prevent manipulation or fraud regarding certificates of conformity issued to companies will be addressed through further guidance from the Commission as the text is amended.

“It is time to put an end to greenwashing. Our position ends the proliferation of misleading green claims that have deceived consumers for far too long. We will ensure businesses have the right tools to embrace genuine sustainability practices. European consumers want to make sustainable choices — all those offering products or services must guarantee their green claims are scientifically verified,” says Environment Committee rapporteur Cyrus Engerer.

At a press conference held by the two rapporteurs yesterday, it was detailed how this is the first step undertaken in the EP, with further negotiations and the Council’s general approach yet to be discussed.

“We had a very short time because we wanted to finalize this in the parliament by the end of the mandate, which we have managed to do, notwithstanding the fact that it came at a very late stage in this mandate to start negotiations, we only started in the ENVI Committee last September to be assigned file,” said Engerer. 

“We have worked very hard to make it a reality by the end, obviously, with this law, and the other related laws still haven’t gone through all final stages. So once that is done, everything will fall into place. But obviously, we cannot know when the Council will reach its general approach.”

Gallou at ECOS emphasizes that Europe cannot afford to prolong the fight against greenwashing. “Time is running out for the EU to address greenwashing and finalize its Green Claims Directive this year, which the institutions now have a clear mandate to do,” she says.

By Radhika Sikaria