The landscape of environmental claims in Europe today resembles a veritable regulatory labyrinth. According to a Commission study, 53 % of the environmental claims analyzed were deemed vague, unfounded or potentially misleading, and 40 % were not based on any evidence. An environmental claim - or green claim - is any statement made by a company to present its products, services or activities as having a positive impact on the environment. These claims can be of various kinds: a product advertised as "carbon neutral", a company declaring itself to be "net-zero", or the use of terms such as "climate-friendly", "eco-responsible" or "sustainable".
And yet, behind these promises of ecological virtue often lie unverifiable assertions, even unrelated to science-based decarbonization trajectories. In 2020, the European Commission listed more than 230 sustainability labels and around 100 green energy labels on the European market - illustrating the extreme fragmentation of the current framework.
This unregulated proliferation of claims undermines consumer confidence, as well as that of investors and regulators. It makes it difficult to distinguish between companies that are genuinely committed to reducing and eliminating emissions, and those that exploit regulatory loopholes to green their image at low cost.
This asymmetry undermines consumer confidence, but also that of investors and business partners. Worse still, it discredits solutions that are nonetheless essential to climate neutrality, such as geological storage of CO₂, biochar or direct air capture. These CDR technologies, while still in the ramp-up phase, offer permanence and measurability that most carbon credits based on avoidance do not guarantee. Yet, according to Carbon Gap, CDR credits represented 10 % of credits traded in 2022 on the voluntary market.
In the absence of harmonized rules governing corporate communication on their climate efforts, sincere carbon elimination initiatives run the risk of being equated with greenwashing. There is therefore an urgent need to establish a foundation of trust that distinguishes real commitments from empty promises, and steers demand towards sustainable, certified elimination that is compatible with long-term European objectives.
I - Objectives and architecture of the Green Claims Directive
In response to growing mistrust of environmental claims, in March 2023 the European Commission presented a proposal for a directive to regulate "green claims" - or environmental claims, those explicit statements made by companies about the environmental performance of their products or activities. The central objective is clear: to make these claims reliable, comparable and verifiable throughout the internal market, while protecting consumers against greenwashing and establishing fair competition rules.
France directive (the Green Claims Directive or GCD) would apply to all voluntary claims not already covered by other European sectoral texts. It therefore covers a very broad field, including environmental claims based on the use of carbon credits, notably those from CDR projects. It thus aims to establish consistency with other Green Pact instruments, such as the Carbon Removal Certification Framework (CRCF, see our analysis).
In operational terms, the directive imposes a number of structural requirements.
- All claims must be supported by a life cycle analysis taking into account all significant environmental impacts.
- The data used must be based on scientific evidence and validation will necessarily involve ex-ante verification by an accredited body.
- Companies will also have to clearly specify how much of their emissions are offset.The system distinguishes between credits linked to emissions reductions and those linked to the CDR, with full transparency on the nature, origin and quality of the credits used.
II - A structuring lever for the development of permanent CDR
Following adoption by the Commission in March 2023, the directive was approved by the Parliament in March 2024. The trialogue process is underway, with a third session scheduled for June 10, 2025, with a view to transposition into national law from 2026.
Beyond the fight against greenwashing, the Environmental Claims Directive represents a strategic lever for accelerating the development of long-term carbon elimination solutions.. These will be essential to offset the incompressible residual emissions and meet European climate targets.
The CDR requirements for 2050 are considerable. According to estimates of the European Scientific Advisory Board on Climate Change (ESABCC), the European Union will have to eliminate between 500 and 550 MtCO₂e every year, 200 to 250 MtCO₂e of which via permanent methods, such as geological storage or carbon mineralization. According to the The State of Carbon Dioxide Removal 2024, the reality is quite different: in 2024 less than 9 MtCO₂ had been permanently eliminated worldwide, i.e. less than 0.4 % of currently accounted eliminations (more than 2 GtCO₂ are eliminated each year by temporary methods, mainly afforestation, reforestation and land management changes, exposed to the risk of re-emission). The gap between the current level of technological maturity and projected needs underlines the urgency of consistent political support.
In this context, the voluntary carbon market remains one of the main levers for accessing financing for CDR projects. The absence of clear regulatory mechanisms, floor prices or targeted subsidies is still preventing economic players from making massive commitments in this field. The directive, by defining robust rules for claims linked to offsetting, can create a decisive market signal by encouraging demand for permanent, traceable and verifiable elimination.
Without this signal, companies will continue to favor a wait-and-see attitude, to the detriment of investment in long-term projects. This would compromise not only the credibility of private climate commitments, but also the European Union's ability to meet its carbon neutrality trajectory - and, ultimately, remove more CO₂ from the atmosphere than it emits. Achieving this net removal goal - i.e., a situation where CO₂ removals exceed emissions - will require a rapid, coordinated ramp-up of carbon removal solutions capable of guaranteeing sustainability, traceability and climate integrity.
III - For AFEN, an ambitious directive is needed, compatible with the growth of the CDR
For the Environmental Claims Directive to become a real catalyst for carbon elimination (CER), it must incorporate structuring principles. Without them, companies have neither the clarity nor the security they need to steer their commitments towards sustainable elimination, compatible with the European climate trajectory.
Faced with the arbitrations underway in the trilogues, AFEN wanted to put forward a clear and constructive position to ensure that the directive on environmental claims could genuinely support the development of CDR solutions. In a letter addressed with 38 of our partners, to European Parliament co-rapporteurs Sandro Gozi and Delara Burkhardt, as well as to the Polish Permanent Representation and Environment Commissioner Jessika Roswall, we put forward three priority recommendations.
- Firstly, authorize CDR-based offset claims before carbon neutrality is achieved, provided that companies demonstrate a robust emissions reduction trajectory. This flexibility is essential to avoid delaying private investment in CDR, at a time when the sector needs it most to structure itself.
- Secondly, we call for the "Like-for-Like" principle to be included in the final text, with progressive implementation. This principle, by making the offsetting of fossil emissions conditional on the use of permanent CDR, is central to ensuring the integrity of companies' climate commitments. In practical terms, this means that only permanent CDR can offset fossil emissions, resulting from the combustion of geological resources (oil, gas, coal), whose carbon has been stored for millions of years. Conversely, biogenic emissions, resulting from the decomposition of recent organic matter (biomass, agriculture), can be offset by temporary solutions, provided that their carbon cycle remains balanced in the short term. This principle strengthens the climatic integrity of corporate actions, by ensuring temporal consistency between the origin of emissions and the sustainability of their offsetting. However, it needs to be introduced gradually, via delegated acts (European implementing decrees published by the Commission), to give the permanent CDR market the time it needs to structure itself on a large scale.
- Finally, it is crucial to guarantee the exclusive use of ex-post CDR credits, certified according to the CRCF or equivalent international standards, such as those validated by the ICVCM. These safeguards are essential to distinguish robust credits from speculative practices, and enhance the transparency of claims. To achieve this, the Green Claims Directive (GCD) cannot operate in silos: it must form part of an essential regulatory triptych to provide a framework for the communication, certification and reporting of companies' climate efforts. The CRCF defines quality standards for carbon elimination in Europe. Since 2024, the CSRD (Corporate Sustainability Reporting Directive) has required a growing number of companies to publish detailed data on their emissions, reductions and offsetting mechanisms.
An imperative need for coherence - These three texts pursue complementary objectives, but must be consistent in their definitions, scopes and methodological requirements. Failing this, companies run the risk of navigating in a fragmented environment, where a disposal validated under the CRCF would not necessarily be valorizable in a public climate declaration, or where data from the CSRD would not be usable to support a green claim. A clear alignment between texts is therefore essential to avoid regulatory blind spots and reinforce the readability of the European framework.
Failure to integrate these principles would expose the European market to a twofold risk: on the one hand, it would slow down private investment in a sector that is still in its infancy, and on the other, it would deprive Europe of a strategic tool in its climate trajectory. It should be remembered that in Europe, the CDR sector could generate up to 220 billion euros in sales and 670,000 jobs by 2050, according to the European Commission. BCG x AFEN report on the French and European potential of CDR. At a time when trade-offs are being made, it is imperative that the directive creates the conditions for a credible and effective expansion of this essential industry.
Conclusion
The third trialogue, initially scheduled for June 10, 2025 and postponed to the end of the month threatens to delay the adoption of this key text on environmental claims. The coming months will be decisive in finalizing the architecture of this directive. Final adoption of the text is expected by the end of 2025, for transposition into national legislation during 2026.
A number of key points still need to be clarified to guarantee the effectiveness and coherence of the future system. It is crucial to clarify the compatibility between the claims authorized by the Directive and the reporting framework imposed by the CSRD, particularly in terms of transparency on residual emissions and credits used. The rules for accounting for nationally determined contributions will also need to be clarified, to avoid any double-counting between private players and governments.
In this context, carbon elimination players have a key role to play. Here are three key actions to highlight:
- For Buyers (companies) : Bring climate claims into line with the requirements of the directive, so as to value robust EDC credits, distinguishing between reduction and elimination in carbon balances, giving priority to permanent and certified credits, and ensuring consistency with CSRD data. The aim is to avoid greenwashing and reinforce the credibility of net-zero commitments.
- For EDC Producers : Prepare credit portfolios in line with European standards by designing traceable, permanent projects, positioning ourselves on CRCF labels or equivalents, and contributing to open consultations. The aim is to secure access to the EDC credit market and maximize project value.
- For public authorities : Converge the GCD, CRCF and CSRD frameworks to create a legible, incentive-based regulatory environment, by introducing the Like-for-Like principle, guaranteeing the valuation of certified EDCs in CSRD reporting, and avoiding fragmentation between reporting, certification and communication. The aim is to send a clear signal to the markets and trigger the investments needed to industrialize EDCs.
The Green Claims Directive represents a strategic turning point. It can enable the European Union to restore credibility to its climate commitments, while creating a framework conducive to investment in permanent, verifiable, high-quality carbon removals. For AFEN, the stakes are twofold: to ensure the environmental integrity of claims while supporting the structuring of a European CDR market, an essential condition for achieving - and surpassing - climate neutrality by 2050.
by Raphaël Cario
