Advertising environmental or climate friendliness through greenhouse gas offset measures under the EmpCo Directive

Directive (EU) 2024/825 on empowering consumers for the green transition (the so-called “Empowering Consumers” or “EmpCo” Directive) brings significant changes to environmental advertising. 

The new requirements, which apply exclusively in the B2C sector – that is, wherever businesses interact with consumers – and are implemented through a revised version of the Unfair Competition Act (UWG), will take effect on September 27, 2026. As things stand, no transition period is planned, not even for products already on the market.

Anyone who engages in environmental advertising or intends to do so in the future and wishes to continue operating on the market in compliance with the law as of September 27, 2026, should familiarize themselves with the new rules now at the latest and, where necessary, take appropriate measures.

I. Scope of Application of the New UWG Rules

The amendment to the UWG introduces several categories of environmental business practices, each of which is subject to its own set of regulations. 
Specifically, this applies, among other things, to:

• “general environmental claims” that, due to a lack of specification within the same medium, pose a particular risk of misleading consumers;
• “sustainability labels,” which in the future must be based on a certification system or be established by the government;
• “future environmental performance,” i. e., statements about environmental performance not yet achieved that are linked to a robust implementation plan; 
• product-related claims regarding environmental or climate friendliness through “offsetting of greenhouse gas emissions,” which will be prohibited in the future.

As part of our HEUKING series on the aforementioned practices covered by the EmpCo Directive, Part 1 dealt with “general environmental claims” (available here), Part 2 with “sustainability labels” (available here), and Part 3 with advertising claims regarding “future environmental performance” (available here). This article now focuses specifically on the regulations governing advertising that claims environmental or climate friendliness through the offsetting of greenhouse gas emissions.

II. Advertising environmental or climate friendliness through greenhouse gas emissions offsetting

Increased consumer awareness of climate change and its causes has led many companies to attempt to reduce their greenhouse gas footprint and, naturally, to advertise this fact. As an alternative to the actual reduction of a company’s own greenhouse gas emissions – which is often difficult to achieve in practice – companies may consider implementing measures designed to offset their own greenhouse gas emissions elsewhere. For years now, a specialized market for such offset measures has been developing. Companies can “purchase” offset services from relevant providers, which may involve, for example, planting trees on land specifically acquired for this purpose. 

However, such measures are often not very transparent and, upon closer inspection, turn out to be of little climate effectiveness. In the case of many projects marketed for the purpose of greenhouse gas offsetting, it is particularly doubtful whether they actually lead to an additional net reduction in greenhouse gases – such as projects intended to promote the use of renewable energy (which, however, is already the most economical form of energy in most countries, making its increased use likely anyway) or projects intended to reduce deforestation by placing forest areas under protection (which is based on assumptions that are difficult to objectively verify).

Another problem with advertising the alleged climate-friendliness of products is that it often does not make it sufficiently clear to the consumer whether a product advertised in this way caused fewer greenhouse gas emissions during its production (or whether a service advertised in this way has caused fewer greenhouse gas emissions at the time of its provision) or whether these emissions were merely offset by the provider or a third party commissioned by the provider through other measures outside the manufacturing or provision process.

In particular, the latter aspect prompted the EU legislator to include particularly restrictive provisions in the EmpCo Directive regarding advertising that claims a product’s environmental or climate-friendly nature is achieved through the offsetting of greenhouse gas emissions. According to Recital 12 of the Directive, such advertising is to be “prohibited in all circumstances,” which the EU legislator even considers to be “particularly important.”

1. New Provisions in the UWG

The EmpCo Directive provides that environmental advertising of the aforementioned type is prohibited by including it in the “blacklist” of commercial practices that are always prohibited vis-à-vis consumers. The German legislature has therefore, in transposing the EmpCo Directive into German law, decided to add a corresponding provision to the “blacklist” (Annex to Section 3(3) of the UWG), pursuant to the new subparagraph 4.c) of which it will henceforth always be impermissible to advertise to consumers with

“a statement which is based on the offsetting of greenhouse gas emissions and according to which a product has a neutral, reduced, or positive impact on the environment with regard to greenhouse gas emissions.”

2. Examples of affected advertising claims

Recital 12 of the EmpCo Directive lists various examples of advertising claims that will be prohibited in the future, which suggest that the advertised product has a neutral, reduced, or even positive environmental impact in terms of greenhouse gas emissions, namely “climate neutral,” “CO₂ neutral certified,” “carbon positive,” “climate net zero”, “climate compensated,” “reduced climate impact,” or “limited CO₂ footprint.” This list is merely illustrative and not exhaustive; all formulations that, in the understanding of consumers, have a comparable meaning are, of course, equally covered by the prohibition. 

According to the wording of the law, it is not necessary for the advertising to also mention the greenhouse gas offset measures for the claim to be prohibited; rather, it is sufficient that the advertised environmental or climate-friendly nature of the product is actually based on such offset measures (and not, for example, on the avoidance of greenhouse gas emissions during the production of the goods or the provision of the service). However, given the generally presumed inadmissibility of using general environmental claims (see our ESG Update 1/2026 on this topic), the use of advertising claims such as “climate neutral” or similar will in the future impose an indirect obligation on the advertising company to provide justification, meaning that such claims cannot be used in isolation in practice anyway. As a general rule, a more detailed justification will need to be provided alongside an advertising claim regarding environmental or climate friendliness. If the advertised environmental or climate friendliness of the product is based (as is so often the case) on greenhouse gas offset measures, it becomes evident that the prerequisites of subparagraph 4.c) of the “blacklist” are met and the advertising is therefore inadmissible.

3. Product Advertising vs. Corporate Advertising

Both the aforementioned Recital No. 12 of the EmpCo Directive and the wording of the new  subparagraph 4.c) of the Annex to Section 3(3) of the UWG cited above distinguish between product advertising on the one hand and (non-product-related) image advertising of the advertising company on the other. Product advertising that suggests reduced environmental impact will henceforth always be prohibited vis-à-vis consumers if the reduced environmental impact is achieved through greenhouse gas offset measures. In contrast, it remains possible to promote the advertising company’s commitment to environmental protection in a manner not related to a specific product, including with regard to greenhouse gas offset measures it has implemented. Of course, this representation must meet the general requirements for advertising claims, i. e., it must not be misleading in particular. However, the legislature explicitly does not intend to impose a general ban on image advertising regarding offsetting measures.

4. Tightening of the existing legal framework

Even under the previous legal framework, product advertising that touted environmental or climate-friendly credentials through greenhouse gas offsets was not without its problems. By way of example, reference is made to the decision of the Federal Court of Justice dated June 27, 2024 (Case No.: I ZR 98/23), which concerned the admissibility under competition law of advertising a food product as allegedly “climate neutral.” In fact, the production of the food product (naturally) resulted in greenhouse gas emissions; however, the advertising company had supported climate protection projects through a relevant service provider (namely ClimatePartner), which led to the mathematical offsetting of the greenhouse gas emissions generated during the production of the food product. The Federal Court of Justice (BGH) ruled that advertising the food product as “climate neutral” was misleading, despite the use of the ClimatePartner logo in the advertisement. In the field of environmental advertising (as in the field of health advertising), particularly strict requirements must be imposed on the accuracy, unambiguity, and clarity of advertising claims (the so-called “principle of strictness”), because the risk of misleading consumers is particularly high in these areas and, accordingly, there is an increased need for consumer information. Since the consumer targeted by the advertisement could interpret the promotion of the product as “climate neutral” to mean that the production process itself already takes place without greenhouse gas emissions (which did not correspond to the facts), the consumer is subject to a misconception triggered by the advertisement and is misled in a manner relevant to competition. The ClimatePartner logo used in the advertisement does not rule out this misconception because it was not explained exactly what role ClimatePartner plays in relation to the advertised product; thus, it was conceivable to the consumer, for example, that this was a partner company commissioned by the product manufacturer to install filtration systems in production, assist in establishing climate-friendly manufacturing processes, or supply climate-optimized raw materials. Nor did the Federal Court of Justice (BGH) consider the fact that consumers can learn more about the offset measures offered by ClimatePartner on its website to be sufficient to avoid the risk of misleading consumers, since such information should have already been provided in the product manufacturer’s own advertising. 

Even under current law, advertising that highlights a product’s environmental or climate-friendly nature – achieved through greenhouse gas offset measures – is therefore only permissible if the consumer is clearly informed in the advertisement itself that the touted environmental or climate-friendly nature is based on such offset measures and what those measures specifically are. This is the reason why many such advertising campaigns fail to meet the legal requirements even today. Furthermore, it must naturally be the case that the offsetting measure actually reduces greenhouse gases to an extent that makes the advertising claim appear accurate; this, too, represents a significant hurdle.

The EmpCo Directive and its implementation in the German Unfair Competition Act (UWG) further tighten this already restrictive legal framework, rendering such advertising claims in consumer-directed product advertising absolutely impermissible in the future, regardless of whether the claim is likely to mislead or whether such misleading effects could be avoided through explanatory notes.

III. What are the consequences of violating the EmpCo?

Violations of the provisions of the EmpCo Directive or the UWG in its version effective as of September 27, 2026, will primarily be pursued by consumer and competition associations as well as eligible competitors. In practice, this entails the risk of costly cease-and-desist letters and, if an out-of-court settlement is not reached, preliminary injunctions and injunctive relief actions.

This is particularly problematic when the prohibited advertising is printed on products or their packaging, as this risks rendering them unsellable. Potential claims for damages and the risk of reputational damage must also be taken into account.

IV. Recommendations for Action and Outlook

The implementing regulations for the EmpCo Directive present companies with significant legal and practical challenges. There is not much time left before the new provisions of the UWG take effect on September 27, 2026. Companies should therefore ensure in a timely manner that, for example, products or product packaging, print advertisements, and websites no longer contain any impermissible claims regarding the environmental or climate-friendly nature of products – claims that are intended to be substantiated by greenhouse gas offset measures – by this date at the latest. 

It is to be expected that, once the new legal framework takes effect, consumer protection and competition associations in particular will strictly monitor compliance with the new regulations and consistently pursue violations – typically through costly cease-and-desist letters.

However, the legal change does not affect (non-product-related) image advertising by companies promoting their commitment to climate protection, which may also consist of supporting greenhouse gas offset measures. This type of advertising will not be prohibited per se in the future. However, as has been the case up to now, the strict requirements regarding the accuracy, unambiguity, and clarity of environmental advertising claims must still be observed to prevent such advertising from being prohibited as misleading.

We are happy to assist you in implementing the new UWG rules in a timely manner and will continue to help you communicate your commitment to sustainability in a legally compliant manner.