As technical negotiations on the EU Green Claims Directive approach, the International Emissions Trading Association (IETA) has urged policymakers to provide clearer guidelines on the use of emission reduction and removal credits in corporate environmental claims.
The Green Claims Directive aims to establish rules for how businesses substantiate environmental claims made to consumers, including those involving carbon credits. While the European Commission has not proposed explicit regulations on the use of credits, the European Parliament is pushing for tighter restrictions, potentially limiting their role in corporate claims and introducing conditions beyond simple disclosure requirements.
The proposed directive is intended to protect consumers from misleading environmental claims. However, IETA warns that excessive restrictions on carbon credit usage could undermine corporate climate action. The association is advocating for a transparent framework that allows businesses to use carbon credits responsibly without unnecessary limitations.
“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,” she added. “A requirement for residual emissions would only deter companies from engaging in the necessary climate action on the pathway to net zero.”
The European Parliament has also suggested placing restrictions on the types of carbon removal credits that can be used in claims, distinguishing between nature-based and engineered removals. IETA is calling for recognition of both approaches, including removals from the EU Carbon Removal Certification Framework (CRCF) and equivalent international schemes, as essential to achieving net-zero targets.
The directive will be discussed in trilogue negotiations over the coming weeks, with a provisional agreement expected before the summer recess.
