EU Directive: Empowering Consumers for the Green Transition (ECGT)
The EU Directive, Empowering Consumers for the Green Transition (ECGT), takes effect on September 27, 2026. (1) The goal of ECGT is to protect consumers by ensuring that environmental claims are fair, understandable, and reliable. It covers a broad range of possible product sustainability claims by businesses. This regulation does create a new compliance requirement for businesses, but it also provides sustainability and marketing teams with important guidance that helps create consistency in sustainability communications.
Key takeaways specific to carbon offsetting
- ECGT takes effect September 27, 2026, and prohibits claims that a product or service has a neutral, reduced, or positive environmental impact based on offsetting alone.
- Named example phrases the regulation prohibits include climate neutral, CO2 neutral certified, carbon positive, climate net zero, climate compensated, reduced climate impact, and limited CO2 footprint.
- ECGT does not want to deter investment in carbon credits. It wants companies to accurately communicate the sustainability benefits created by carbon credit projects.
- SBTi’s guidance recommends framing carbon credits as taking responsibility for ongoing emissions, not as making a product or company carbon neutral.
Voluntary carbon projects deliver important climate progress and environmental benefits that provide many talking points for companies. They reduce climate super pollutants by removing industrial emissions like methane, N2O, HFCs and others. They protect and restore valuable ecosystems and carbon sinks like forests, mangroves and grasslands. They help communities by reducing local pollution, creating employment opportunities, improving access to healthcare, and more.
The Science Based Targets Initiative (SBTi), a global leader in business climate action, concludes that alongside aggressive decarbonization, we should use high-quality carbon credits to take responsibility for our ongoing emissions. SBTi recognizes that carbon credits are important “to help limit temperature overshoot, mitigate transition risks, and support climate solutions.” (2)
ECGT language on carbon offsetting recognizes this value by acknowledging that they do not want to deter investment in carbon credits. They just want companies to focus on communicating the benefits of the projects they support and avoid claims that go beyond the scope of carbon credits, which is good for everyone, companies and consumers alike.
The regulation reinforces that carbon credits do not change the sustainability of a product, so carbon credit buyers should not suggest that their products are more sustainable because of carbon credits. Instead, companies need to promote their carbon credit purchases as climate contributions to take responsibility for their carbon emissions by supporting projects that do great things like reducing global carbon emissions, reducing pollution, preventing deforestation, restoring forests, and more.
ECGT language related to carbon offsetting
The regulation prohibits claims that a product or service has a neutral, reduced, or positive impact on the environment based solely on offsetting greenhouse gas emissions. Named examples of prohibited claims include:
- climate neutral
- CO2 neutral certified
- carbon positive
- climate net zero
- climate compensated
- reduced climate impact
- limited CO2 footprint
These claims are only allowed when they rest on a product’s actual lifecycle impact. Offsetting emissions outside of a product’s value chain create a different global benefit that is not related to the specific product.
Companies should still promote their investments in environmental initiatives, including carbon credit projects, as long as they present that information in a way that is not misleading and that meets the other requirements of Union law. (1)
SBTi provides guidance on climate contribution language in its Corporate Net Zero Standard Version 2.0 Draft for Second Public Consultation, November 2025. While the SBTi language is fairly technical, it has a good framework for crafting a climate contribution message.
SBTi Language for Carbon Credits (3)
- Take responsibility for ongoing emissions by delivering mitigation impact contributions
- Carbon credits certify the mitigation outcomes of projects that reduce, avoid, or remove carbon emissions
- Activities that reduce emissions from emission sources not located within the company’s value chain
- Activities that conserve, protect, and enhance natural carbon sinks
- Activities that capture and store carbon in storage pools
SBTi’s draft standard also walks through sample claim language for this kind of contribution. In general, the samples move from a simple percentage statement, to naming a specific verified tonnage tied to that percentage, to a fuller statement that breaks the tonnage into reductions versus removals. Across all three, the framing stays consistent: a company took responsibility for a defined share of its ongoing emissions over a set period, by funding a specific, verified amount of mitigation, achieved through emission reductions or removals. (3) This can be expanded and made more compelling with details on the global sustainability benefits created by the voluntary carbon projects you supported.
While ECGT does add a new compliance burden for businesses, it helps create consistency in sustainability messaging that is important to building confidence in voluntary carbon projects and scaling the industry to help us achieve progress on global carbon emissions.
FAQ: ECGT and Carbon Credit Claims
When does the ECGT directive take effect?
The rules apply across the EU from September 27, 2026, after member states transposed the directive into national law by March 27, 2026.
Does ECGT allow carbon offsetting?
Yes. ECGT does not want to deter companies from purchasing carbon credits. It just bans specific marketing claims that a product or service is environmentally neutral, reduced impact, or positive based on offsetting alone. Advertising an investment in carbon credit projects is still allowed if it is not misleading.
What carbon offsetting phrases does ECGT specifically prohibit?
Named examples include climate neutral, CO2 neutral certified, carbon positive, climate net zero, climate compensated, reduced climate impact, and limited CO2 footprint, when those claims are based on offsetting rather than a product’s actual lifecycle impact.
How should a company describe its carbon credit purchases instead?
SBTi’s guidance recommends stating the specific verified tonnage of emissions reductions or removals funded and describing that as taking responsibility for a defined share of ongoing emissions. It is also acceptable to talk about the global sustainability benefits of the projects supported by your carbon credit purchase.
Does this rule apply to company level sustainability claims too?
ECGT is focused on claims about specific products and services in consumer marketing. Broader company level sustainability communication is a separate matter governed by other rules.
While ECGT does add a new compliance burden for businesses, it helps create consistency in sustainability messaging that is important to building confidence in voluntary carbon projects and scaling the industry to help us achieve progress on global carbon emissions.
Disclaimer: Terrapass does not provide legal or regulatory advice. Any interpretation of regulation must be approved by your legal representative.
References:
(1) https://eur-lex.europa.eu/eli/dir/2024/825/oj
(2) https://files.sciencebasedtargets.org/production/files/Corporate-Net-Zero-Standard-version-2.pdf
(3) https://files.sciencebasedtargets.org/production/files/CNZS-V2-Second-Consultation-Draft.pdf
