Upcoming amendment to UCPD and CRD

In brief

On 17 January 2024, the European Parliament adopted a proposal for a new European Directive as regards empowering consumers for the green transition (“EmpCo Directive“), introducing new rules to ban misleading advertising and to provide consumers with better product information. To achieve this, a number of marketing practices related to greenwashing will be added to the EU list of prohibited commercial practices. In addition, new rules on informing consumers on a product’s durability will be introduced.

Environmental claims

The text as adopted by the European Parliament amends the Unfair Commercial Practices Directive by adding certain environmental claims to the list of prohibited unfair commercial practices (the so-called ‘black list’).

In the EmpCo Directive, “environmental claims” are defined as any non-mandatory messages or representations, irrespective of their form, used in the context of a commercial communication, and which state or imply that a product, product category, brand or trader has a positive, zero, less damaging or improved impact on the environment.

In summary, the following practices are expressly prohibited under the EmpCo Directive:

Making generic environmental claims without being able to demonstrate excellent environmental performance relevant to the claim.

A “generic environmental claim” has been defined as an environmental claim without further specifications. This means that claims like ‘environmentally friendly’, ‘eco-friendly’, ‘green’, ‘ecological’, ‘climate-friendly’, ‘carbon friendly’ and ‘energy efficient’ can only be used if the product in question has recognized excellent environmental performance, e.g., by complying with officially recognized ecolabelling schemes.

Displaying a sustainability label (i.e., a voluntary trust mark, quality mark or equivalent, either public or private, that aims to set apart and promote a product, a process or a business by referring to its environmental and/or social characteristics, including an environmental label) that is not based on a certification scheme or is not established by public authorities.

The certification scheme should be a transparent, fair and non-discriminatory third-party scheme, the compliance of which is subject to an objective monitoring by a third party other than the trader or the scheme owner.

Claiming that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions when such claim is based on the offsetting of greenhouse gas emissions.

Claims like ‘climate neutral’, ‘CO2 neutral certified’, ‘carbon positive’, ‘climate net zero’, ‘climate compensated’, ‘reduced climate impact’ and ‘limited CO2 footprint’ should only be allowed when based on the actual lifecycle impact of the product in question and not on the offsetting of greenhouse gas emissions. According to the recitals, companies should, however, not be prevented from advertising their investments in environmental initiatives, as long as such information is provided in a non-misleading manner.

Making an environmental claim about the entire product or the trader’s entire business when it concerns only certain aspects of the product or the business.

As an example, the recitals refer to a trader giving the impression that it is only using renewable energy sources when in fact several of the trader’s business facilities still use fossil fuels. This being said, the prohibition should not prevent the use of environmental claims about an entire business, provided that those claims are accurate and verifiable and that they do not overstate the environmental benefit.

In addition, the EmpCo Directive requires that when making future environmental performance claims (e.g., ‘Climate Neutral by 2050’), traders must set out clear, objective, publicly available, measurable and time-bound targets and have them regularly verified by an independent third-party expert, whose findings are to be made available to consumers.

Durability focus

The EmpCo Directive also focuses on the durability of products by:

Including the following commercial practices on the ‘black list’:
1. Unfounded durability claims (e.g., claiming that a washing machine will last for 5,000 washing cycles if this is not true under normal conditions).
2. Unfounded repairability claims (e.g., presenting a product as allowing repair when it does not).
3. Inducing consumers to replace or replenish the consumables of a good (e.g., printer cartridges) earlier than would otherwise be necessary for technical reasons.
4. Any commercial communication on a product that contains a feature introduced to limit its durability, if the trader is aware of the information on the feature and its effects on the durability.
Requiring that information on legal and commercial guarantees is to be more visible and introducing a new, harmonized label to give more prominence to goods with an extended guarantee period.
Requiring information on the repairability of products to be provided to consumers.

Relationship with Green Claims Directive

The new EmpCo Directive will be complemented by the Green Claims Directive, which is currently being discussed at committee stage in the European Parliament. The upcoming Green Claims Directive will be more specific and elaborate on the conditions for using environmental claims. For instance, under the current version of the proposed Green Claims Directive, the substantiation and communication of a green claim shall be subject to third-party verification prior to the green claim being made public or the label being displayed, and the information on which the environmental claim is based will have to be made available to the public in a physical form or in the form of a weblink, QR code or equivalent.

Next steps

The EmpCo Directive is still subject to final approval from the Council, after which it will be published in the Official Journal. EU Member States will then have 24 months to transpose its contents into national law (expected in 2026).

There is, however, no need to wait on the transposition of these new rules, as on certain aspects they mostly clarify what is already prohibited as a misleading practice. See, for example, the guidance of European Commission or the FPS Economy for Belgium.