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Introduction to the Misinterpretation

In recent times, various media outlets have presented a somewhat skewed perspective on the European Union’s policies regarding environmental claims, particularly those associated with the term ‘carbon neutral’. This has led to a widespread belief that the EU is outright banning these terms, which isn’t the case. As a leading carbon reduction consultancy, Auditel aims to shed light on this topic, clarifying the actual stance of the EU and its implications for businesses striving for sustainability.

Understanding the Background

The EU’s amendment to Article 6(2) of Directive 2005/29/EC, voted into law on January 17, 2024, has been the center of much discussion. This directive seeks to protect the public from improper and inaccurate environmental claims about products and services. Contrary to popular belief, this is not an outright ban on terms like ‘carbon neutral’. Instead, it sets specific conditions for making such claims.

The Role of Carbon Offset Schemes

There has been criticism of certain carbon offset schemes, particularly those related to forestry, for not delivering promised emission reductions. However, it is essential to note that not all offset schemes are ineffective. In fact, reputable schemes play a vital role in financing emission abatement projects and provide tangible environmental and social benefits. They are crucial in the journey towards decarbonisation, especially for organizations that cannot immediately transition to net zero emissions.

EU’s Requirements for Environmental Claims

The EU stipulates that any environmental claim, including those about carbon neutrality, must be:

  • Based on clear, objective, and publicly available commitments.
  • Accompanied by a detailed and realistic implementation plan.
  • Verified by an independent third party with expertise in environmental issues.

These requirements ensure that claims are not only credible but also genuinely contribute to environmental sustainability.

The Actual Amendment and its Implications

The newly adopted legislation details several key points that businesses must understand:

  • Prohibition of Unsubstantiated Claims: The directive aims to prohibit environmental claims that are not supported by verifiable and committed actions.
  • Specific Criteria for Claims: Claims like ‘climate neutral’ or ‘carbon neutral’ must reflect the actual lifecycle impact of the product and should not be based solely on offsetting emissions outside the product’s value chain.
  • Transparency and Verification: Companies are encouraged to support environmental initiatives, including carbon credit projects, as long as the information provided is transparent and complies with Union law.

What This Means for Businesses

For businesses, particularly those engaged in climate-friendly activities, the directive should not be seen as a hindrance but as a guide towards more authentic and substantiated environmental stewardship. Claims of environmental benefits based on offsets are still permissible, provided they meet the established criteria.

Auditel’s Compliance and Guidance

At Auditel, our carbon accounting practices are already in line with these new standards. We prepare any claim of carbon neutrality in accordance with recognized standards like PAS 2060 or ISO 14068-1. Our approach ensures that claims are not solely based on the use of offsets and are compliant with the EU’s directives.

Conclusion: Embracing Transparent Sustainability

The EU’s directive, while seemingly restrictive, actually paves the way for more transparent and meaningful claims of carbon neutrality. It encourages organizations to adopt genuine, effective strategies for emission reduction and environmental protection. Auditel is committed to guiding businesses through this new landscape, ensuring that their journey towards sustainability is both compliant and impactful.