Companies would be largely free to rely on carbon offsetting to back up their claims to be climate friendly, under a leaked draft inter-governmental position on a European anti-greenwashing directive, sparking criticism that one set of standards might apply to companies and another to the products and services they sell.
In an updated compromise text, dated 22 May and seen by Euronews, Belgium has made what may be its final attempt to forge an inter-governmental position on a proposed Green Claims Directive before it hands over the rotating presidency of the EU Council to Hungary in July.
A key sticking point over months of back-room talks has been the extent to which offsetting, where firms buy tradable carbon credits to balance their greenhouse gas emissions, should be permitted to back up corporate claims regarding their climate impact.
The European Parliament has agreed such offsetting should only be used for ‘residual’ carbon emissions – those that remain when a firm has exhausted all practicable means to reduce them in-house.
However, the latest draft suggests member states may push for broader opportunities to use certified carbon credits – whose advocates say reflect and promote genuine climate mitigation measures such as renewable energy deployment or reforestation projects – when they enter final-stretch negotiations with MEPs.
However, with even the Parliament permitting a limited use of offsetting, the Green Claims Directive looks set to be at odds with separate rules on environmental claims related to products and services, adopted in March and banning any climate-friendliness assertions, from bananas to budget flights, that are based on carbon offsetting.
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This raises the possibility of a situation where a company is banned from selling ‘low carbon’ or ‘green’ flights based on offsetting, but could assert in its advertisements that the corporation as a whole has reduced its carbon footprint or is on a path towards ‘net-zero’ – a pledge that has been made by everyone from tech giants to flat-pack furniture makers and big oil.
“Carbon offsetting doesn't magically erase emissions - it simply greenwashes them using an accounting trick,” said Margaux Le Gallou, a specialist on greenwashing practices at the Brussels-based Environmental Coalition on Standards, an NGO. “If the Council allows the use of carbon credits without limits, companies will have little incentive to reduce their emissions.”
“The Green Claims Directive must align with the science and EU climate commitments under the Paris Agreement by banning the use of carbon credits for everything beyond residual emissions,” le Gallou told Euronews.
But is not all good news for companies, notably petroleum firms: the compromise text adds a definition clarifying that a company’s total carbon footprint would be based on scope 1, 2 and 3 emissions.
The climate pledges of most petroleum firms are based on scope 1 and 2 emissions, meaning greenhouse gases emitted directly by the firm, and those related to the energy it consumes, for instance through electricity from a coal- or gas-fired power plant. Scope 3 covers emissions only indirectly linked to a company, including the end use of its products.
The compromise text was due to be discussed by national delegates in a Council environment working group today (28 May). The Belgian presidency hopes to schedule it for adoption by senior diplomats on 5 June, then environment ministers at a 17 June summit.
Negotiations with a newly elected European Parliament are unlikely to begin before mid-September at the earliest, diplomatic sources told Euronews..
