Since 27 September, companies selling in the EU can’t call a product carbon neutral because they bought offsets elsewhere. Almost a third of the big companies tracked by Net Zero Tracker allow credits in their net zero plans.
A chocolate bar or a smartwatch sold in the EU can no longer be called carbon neutral because of offsets. Since 27 September, EU consumer law has banned such claims when they rest on offsetting outside a product’s value chain. The ban covers any “neutral, reduced or positive” climate claim built that way. It comes from a 2024 EU directive on consumer rights in the green transition. Vague terms such as “eco-friendly” now need proof of recognised excellent performance. Sustainability labels need a certification scheme or a public authority behind them.
In a 2020 study of 150 environmental claims, cited by the Commission, 53.3% were vague, misleading or unfounded. Some 40% were unsubstantiated. In a 2023 market check by Germany’s consumer centres, 53 of 87 food products with climate claims advertised climate neutrality. Only 21 told shoppers on the pack that offset payments lay behind the claim.
How many companies lean on offsets
Net Zero Tracker’s 2025 stocktake found net zero targets at 1,245 of the 1,987 listed companies in the Forbes Global 2000. Almost a third of the companies in its database allow carbon credits to count towards those targets. Of those, 60% set no conditions on how many they’ll use.
The stocktake doesn’t say whether that share covers all 1,987 companies or only the 1,245 with targets. Without that base, there’s no accurate count of how many firms fall into the 60%.
Commercial research by MSCI shows far fewer actually buy them. It found that 1,227 of 8,844 listed companies in its global index, or 14%, used carbon credits between 2017 and 2022. For firms buying more than 1,000 tonnes, the median covered 13% of direct and energy emissions. Counting supply chains, the share fell to 0.5%.
Airlines and carmakers leaned hardest in a Nature Communications study of 89 oil, airline and car companies from 2014 to 2023. EasyJet offset 78.2% of its emissions. Volkswagen offset 50.3% of its direct and energy emissions, and BMW 45.2%. The authors found “no significant difference between the climate strategies of companies that purchased credits and those that did not.”
Brands dropped the label early
Apple removed “carbon neutral” from the Apple Watch Series 11, Ultra 3 and Mac mini last autumn. In August 2025 a Frankfurt court had ruled its “CO2 neutral” Apple Watch adverts misleading. The Paraguayan eucalyptus plantations behind the offsets were leased only until 2029. Apple said its commitment would “continue, regardless of new EU rules restricting how we can talk about it.”
ClimatePartner was the provider named most often in the German check, on 25 products. The company withdrew its “carbon neutral” label in April 2023, saying “the regulatory framework is changing”. That June, Nestlé dropped carbon neutral pledges for KitKat and Nespresso, saying it was “moving away from investing in carbon offsets for our brands”.
Net zero dates have moved for other reasons
The Commission’s guidance limits the offset ban to products. Company-level offset claims stay legal, though general rules on misleading marketing still apply. A promise such as net zero by 2050 now needs a detailed implementation plan, checked by an independent expert.
RESET found no company that has moved a net zero date because of the directive. HSBC pushed back its goal for operations, travel and suppliers from 2030 to 2050 in February 2025. Hitting 2030, the bank said, would “need to rely heavily on carbon offsets”. Burberry moved its target from 2040 to 2050 in May. TotalEnergies dropped its 2050 net zero aim in March, citing EU rules on transition plans. Neither pointed to the consumer directive.
Other regions are slower
Switzerland’s federal environment office issued guidance in March saying product claims can’t rest on offsets outside the product’s life cycle. Norway’s parliament passed the EU rules in June. They won’t apply there until 2027, once the directive enters the EEA agreement.
In Britain, the Advertising Standards Authority requires offset-based claims to say so next to the claim. It has ruled against BrewDog’s “carbon negative” and Charles Tyrwhitt’s “100% carbon neutral” adverts. Since April 2025 the Competition and Markets Authority can fine firms up to 10% of global turnover without going to court.
Canada’s parliament went the other way in March, when it removed a requirement that environmental claims rest on an “internationally recognized methodology”. California asks firms making carbon neutral claims to publish how they verify them, with penalties of up to $2,500 a day per violation.
Brussels has tightened several climate rules for business this month, including a rating scheme for data centres. National regulators will enforce the offset ban. In May the Commission opened infringement cases against 20 member states, including France, Spain and the Netherlands, for incomplete transposition. The first test is whether a national regulator fines a household brand over an offset-based label.
Subscribe
Sign-up to receive our newsletter
