Introduction

The EU Empowering Consumers for the Green Transition (ECGT) Directive — Directive (EU) 2024/825 — takes full effect on September 27, 2026, establishing an outright ban on generic environmental claims and making offset-based “carbon neutral” product labels a blacklisted commercial practice across all 27 EU member states. Companies that cannot substantiate their environmental claims with verified, independently audited emissions data face fines of up to 4% of annual turnover, confiscation of revenues from non-compliant claims, and exclusion from public procurement for up to 12 months. For executive teams, the directive raises a question that goes beyond legal review: whether the organization’s carbon data infrastructure is capable of supporting the claims it intends to keep.

Key Takeaways

• Directive (EU) 2024/825 is already law, fully unaffected by the withdrawal of the separate Green Claims Directive, and enforceable from September 27, 2026.
• Product-level carbon neutrality claims based exclusively on greenhouse gas offsetting are outright banned — regardless of the quality or certification standard of the credits purchased — and are not a legal basis for a product-level climate claim from September 27, 2026.
• Generic terms including “eco-friendly,” “green,” and “sustainable” are prohibited without recognized excellence certification such as the EU Ecolabel or an ISO 14024 Type I scheme.
• Being CSRD-compliant does not mean being ECGT-compliant: entity-level sustainability disclosures do not automatically satisfy product-level evidentiary requirements.
• EU member state authorities have already imposed fines ranging from €1 million (Shein, Italy) to €25 million (DWS, Germany) for unsubstantiated environmental claims.

What Is the EU ECGT Directive and Who Does It Cover?

The ECGT Directive amends two foundational EU consumer protection instruments: the Unfair Commercial Practices Directive (2005/29/EC) and the Consumer Rights Directive (2011/83/EU). Member states were required to transpose it into national law by March 27, 2026. Enforcement begins September 27, 2026 with no further transition period.

The directive’s territorial reach is determined by market, not headquarters. Any company making consumer-facing environmental claims in the EU — regardless of where it is incorporated — is subject to the rules. One boundary is worth noting for companies with active CSRD programs: sustainability reports addressed to investors sit outside ECGT scope. However, as the European Commission’s Questions and Answers document (November 27, 2025) confirms, the moment any portion of those reports is reused in voluntary consumer-facing advertising or marketing, the full ECGT evidentiary standard applies.

The EU’s proposed Green Claims Directive — a stricter instrument that would have required mandatory pre-market third-party verification of all environmental claims — was withdrawn by the European Commission in June 2025. That withdrawal has no effect on the ECGT, which proceeds to full application on its own legal basis. Companies that interpreted the GCD withdrawal as a signal of reduced regulatory ambition are mistaken.

Which Environmental Claims Are Banned from September 27, 2026?

The directive establishes a blacklist under Annex I to the UCPD — practices prohibited under all circumstances, with no need to demonstrate harm to individual consumers. Four core categories apply:

Generic environmental claims. Terms such as “eco-friendly,” “green,” “sustainable,” “climate positive,” and “nature-friendly” are banned unless the company holds a recognized certification: the EU Ecolabel, a national EN ISO 14024 Type I scheme such as Germany’s Blue Angel or the Nordic Swan, or demonstrated top performance under applicable EU law such as the Energy Labelling Regulation.

Offset-based neutrality claims. Claiming that a product has a neutral, reduced, or positive impact on the environment based on the offsetting of greenhouse gas emissions is an absolute prohibition. A product marketed as “carbon neutral” because the company purchases carbon credits — regardless of the quality or verification standard of those credits — is blacklisted from September 27, 2026.

Partial-scope claims presented as whole-business claims. A company whose logistics operations use renewable energy cannot describe its entire business as sustainable on that basis alone.

Legal requirement claims presented as distinctive features. Presenting a mandatory regulatory threshold — such as minimum recycled content in packaging — as a voluntary sustainability achievement is prohibited.

One additional compliance perimeter deserves attention. The European Commission Q&A confirms that brand names, product names, and visual identity elements — green color palettes, nature-themed imagery, sustainability symbols — are not excluded from ECGT scope. An environmental association created through branding alone may constitute a claim requiring full substantiation.

Why Offset-Based “Carbon Neutral” Claims Fail the ECGT Legal Standard

The ban on offset-based product-level neutrality claims is the most consequential provision for companies currently using carbon credits to support climate marketing. Point 4c of Annex I to the UCPD prohibits claiming that a product has a neutral, reduced, or positive environmental impact in terms of greenhouse gas emissions when that claim is based on offsetting. This is a blacklisted practice, unlawful under all circumstances — regardless of the credit standard applied.

EU courts and member state authorities were already enforcing this standard before September 2026. The Frankfurt Regional Court banned Apple from advertising the Apple Watch as “CO2-neutral” because the forestry-offset leases underpinning the claim had insufficient duration to sustain neutrality over the product’s useful life. The Amsterdam District Court found KLM’s claims about carbon offsetting and Sustainable Aviation Fuel misleading. The Italian Competition Authority imposed an €8 million fine on GLS Group for a non-transparent climate sustainability program. Twenty-one airlines, following coordinated European Commission enforcement action, committed to stop suggesting that CO2 emissions from specific flights can be neutralized or offset.

Forward-looking commitments — “Net Zero by 2040” — remain permitted, but only when backed by a detailed, publicly available implementation plan with measurable and time-bound targets, verified regularly by an independent third-party expert. A net zero target without that structure is a non-compliant claim under the same framework.

What the ECGT Substantiation Standard Actually Requires

The directive requires substantiation based on recognized scientific evidence and assessment methods, with data available to regulators on request. For carbon and climate claims, this resolves into verified GHG accounting — and the gap between what most companies currently hold and what the directive demands is wider than it appears.

A CSRD-compliant entity-level disclosure is not the same as ECGT-compliant product-level substantiation. A product marketed as “low carbon” requires a product-level carbon footprint, calculated using recognized scientific methods, traceable to verified primary data across Scope 1, Scope 2, and the relevant Scope 3 categories across the product’s full lifecycle. Scope 3 — upstream supplier emissions, purchased goods and services, use-of-sold-products, and end-of-life treatment — is the most data-intensive layer, and it is precisely where most CSRD-reporting companies have the least granularity. A Scope 3 category estimate sufficient for an annual sustainability report is not sufficient to defend a product-level climate claim before a national competition authority.

The B2B dimension of this gap is equally material. Upstream claims about raw materials, packaging, and production must be accurate and verifiable across the product lifecycle. When a supplier’s environmental claim migrates into a downstream brand’s consumer-facing communication, both parties face potential exposure if the underlying data cannot be substantiated. Tier-1 suppliers and manufacturers who consider ECGT a B2C matter unrelated to their own operations should revisit that assumption.

Four Actions Before September 27, 2026

Executive teams should prioritize four actions before the enforcement date:

Claims Audit. Map every consumer-facing environmental claim — including brand names, product names, and visual identity elements — against the four prohibited categories. Products already on shelves are subject to the rules from September 27, 2026, regardless of when packaging was produced.

Data Verification. Build verified Scope 1, Scope 2, and — for product-level claims — Scope 3 GHG inventories using recognized scientific methods, traceable to primary data sources and structured for regulatory review. Entity-level reporting data is not a substitute for product-level substantiation.

Supplier Engagement. Introduce contractual evidence requirements specifying the data standard for environmental claims provided by upstream suppliers. Establish internal verification protocols before supplier-originated environmental information enters any consumer-facing communication.

Certification and Implementation Plans. Identify the applicable certification scheme for claims that must be retained. For forward-looking commitments, develop an independently verified implementation plan with measurable, time-bound targets and transparent public disclosure.

Conclusion

The ECGT enforcement date is September 27, 2026. Enforcement at the member-state level is already active, with penalties ranging from €1 million to €25 million applied across fashion, logistics, technology, and financial services ahead of the harmonized application date. Offset certificates ceased to be a legal basis for a product-level climate claim in the EU market as of September 27, 2026. Verified emission reductions, documented with audit-ready GHG data across the full value chain, are the standard the directive requires.

CSOs and CFOs whose organizations make environmental claims in the EU should initiate a structured green claims audit and a carbon data readiness assessment in parallel — treating September 27, 2026 as the operational deadline it is.

Contact ASUENE to learn how our platform enables your organization to build and defend compliant green claims with verified Scope 1, Scope 2, and Scope 3 data before the September 27, 2026 enforcement deadline.

Why Work with ASUENE Inc.?

ASUENE is a key player in carbon accounting, offering a comprehensive platform that measures, reduces, and reports emissions, including Scope 1-3. ASUENE serves over 50,000 clients worldwide, providing an all-in-one solution that integrates GHG accounting, ESG supply chain management, a Carbon Credit exchange platform, and third-party verification.

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