⚖️ The European Green Claims Directive hangs in the balance ⚖️

😮 One of Europe’s most promising climate regulations has been put on ice just before the finish line, what happened?

🇪🇺 On June 10th, European legislators were supposed to hold the last so-called trilogue negotiation to finalise the Green Claims Directive (GCD), a key piece of legislation aimed at false environmental claims by companies, which the EU Commission estimates to make up over 56% of all sustainability claims.

Sadly, plans have changed. My understanding of what unfolded:

1️⃣ Over 20 of Germany’s biggest trade associations, including BDI, BSI, BGA, sent a letter to MEP Sandro Gozi - co-lead negotiator on the GCD, asking for the immediate suspension of the file and requesting a full impact assessment of the bureaucratic costs resulting from it.

2️⃣ This request was echoed by the German permanent representative in the European Council.

3️⃣ Finally, the European People’s Party (EPP) - largest block in the Parliament - requested a formal postponement.

🔦 So where do we stand? The trilogue on the 10th is off the table. The EPP will hold a meeting on that day to determine whether it has a mandate to continue. Best case scenario: trilogues resume and the GCD gets passed before the summer, albeit likely with significant concessions. Worst case: no progress until autumn and a serious risk of axing the GCD as a whole.

👉 Meanwhile, the European Commission is working hard to find a way forward on some of the sticky points. As they relate to carbon removals, the main issues are around the (sadly unpopular) like-for-like principle and what counts as CRCF equivalence in credits used for green claims.

👎 Overall, this is not good news. The GCD, alongside the already finalised Empowering Consumers Directive, represents key legislation to prevent greenwashing and provide regulatory certainty for companies to make environmental claims. Without it, we continue to stay in this limbo where corporates don’t really know what they can and cannot do, leading largely to inaction.

⁉️ What is your take? Any additional views or insights I missed?

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