IETA calls for clarity on role of credits in EU corporate environmental claims rules

BRUSSELS, 18 March – Ahead of technical negotiations for the EU Green Claims Directive, IETA calls for clarity on the future use of emission reduction and removal credits to encourage the responsible use of credits in corporate environmental claims.

The proposal for the Green Claims Directive seeks to establish rules for the substantiation of business-to-consumer corporate environmental claims in the EU, including on the use of carbon credits. 

While the Commission has refrained from proposing explicit rules on the use of credits in claims, there is a push from the European Parliament to limit the use of carbon credits in corporate claims, and to set further conditions beyond disclosure requirements for how these credits can be used.

The purpose of the Directive is to protect EU consumers from misleading claims about companies’ environmental performance. IETA urges EU policymakers to provide clarity on how carbon credits can be transparently and accurately reported without restricting the use of credits in corporate claims.

“Companies should be able to use emission reduction and removal credits for compensation claims to drive the climate ambition we need today,” said Andrea Abrahams, Managing Director at IETA. 

“These claims should not be limited to residual emissions of a company at the point of net zero, which has been proposed in ongoing negotiations,” Abrahams added. “A requirement for residual emissions would only deter companies from engaging in the necessary climate action on the pathway to net zero.”

Moreover, the European Parliament has proposed to set limits on the claims a company can make based on the type of carbon removal credit used, whether nature-based or engineered. IETA urges EU negotiators to recognise the role for both nature-based and engineered removals, from the EU CRCF as well as equivalent international schemes, in delivering net zero.

The Directive will be discussed in trilogue negotiations over the coming weeks, with a provisional agreement expected before the summer recess.