Green Claims Directive Withdrawn: Implications for Packaging Sustainability Claims in the EU

Environmental claims on packaging have become a central feature of corporate sustainability strategies in the EU. Terms such as recyclable, compostable, carbon neutral, and green packaging are now widely used across labels and product marketing to communicate environmental value to consumers. However, this surge in green messaging has outpaced regulatory oversight, leading to widespread concerns about greenwashing, the use of unverified or misleading environmental claims. In response, the European Commission introduced several legislative proposals, including the Packaging and Packaging Waste Regulation (PPWR) and the now-withdrawn Green Claims Directive (GCD). While the PPWR remains active and is moving toward implementation, the GCD was withdrawn in June 2025 following escalating political opposition, concerns about regulatory complexity, and perceived burdens on small and medium-sized enterprises.

On 19 June 2025, the European Commission formally announced its intention to withdraw the proposal for the Green Claims Directive (GCD). The decision came after sustained pressure from political groups, notably the European People’s Party (EPP), who cited the administrative burden and impracticality of the proposed pre-approval mechanisms. Initially proposed in March 2023, the GCD sought to address the rise of unsubstantiated green claims by introducing harmonised standards and minimum requirements for voluntary B2C environmental marketing. The directive proposed mandatory third-party verification of claims such as “carbon neutral,” “eco-friendly,” or “biodegradable,” grounded in science-based methodologies including LCA and the Product Environmental Footprint (PEF).

Despite the withdrawal, scrutiny of sustainability claims is intensifying, not just from regulators, but also from consumers, NGOs, investors, and business partners. The absence of a unified EU-level regulation only increases expectations for businesses to demonstrate leadership, credibility, and proactive transparency.

Although the GCD was widely seen as a foundation of the EU’s anti-greenwashing efforts, multiple headwinds led to its collapse:

1. Too Complicated and Costly for Businesses, Especially SMEs One of the main reasons the GCD failed was because it was seen as too complex and expensive to follow, especially for small and medium-sized companies (SMEs). It required:

• All green claims to be verified by a third-party expert before being shown to consumers.
• Use of detailed Life Cycle Assessments (LCA) and scientific tools like Product Environmental Footprint (PEF).
• Proper documentation and transparency about the data and process used to make the claim.

• The GCD gave too much power to EU-level rules, reducing flexibility for national laws.
• It might affect local businesses negatively and slow down economic activity.
• Because of this, the GCD could not get the needed “qualified majority” in the EU Council, and the process was blocked.

• The Unfair Commercial Practices Directive (UCPD) already bans false or misleading environmental claims.
• The Empowering Consumers for the Green Transition Directive also deals with green claims and consumer rights.

• The Corporate Sustainability Due Diligence Directive (CSDDD) was also weakened.
• Other rules like Digital Product Passport and Sustainable Product Regulation are delayed.

Businesses should be aware that the absence of the GCD does not exempt environmental marketing from legal obligations. Existing rules remain enforceable, including:

• The Unfair Commercial Practices Directive (UCPD) prohibits misleading, exaggerated, or vague green claims.
• The Consumer Rights Directive mandates disclosure of core product characteristics, including durability and environmental impact.
• The new Empowering Consumers for the Green Transition Directive (Directive (EU) 2024/825), which entered into force in 2024, explicitly targets greenwashing and becomes fully applicable from 2026.

The Empowering Consumers for the Green Transition Directive (Directive (EU) 2024/825) builds upon existing consumer protection laws to directly address misleading environmental claims. Enforced from 2026, it aims to ensure that sustainability-related product information is accurate, verifiable, and not deceptive. By banning vague terms like “eco-friendly” without evidence, restricting offset-based climate claims, and mandating disclosures on product durability and reparability, the directive establishes a clearer, enforceable framework to support informed consumer choices and curb greenwashing in the EU market.

• Ban on vague terms like “green” or “eco” without recognised environmental performance.
• Restrictions on offset-based climate claims unless supported by robust evidence.
• Mandated disclosures for durability, repairability, and product software updates.
• New categories of prohibited practices, including:
  • Misleading carbon neutrality claims without implementation plans.
  • Claiming repairability when no such option exists.
  • Advertising irrelevant features (e.g., “gluten-free water”) as sustainability benefits.

The withdrawal of the Green Claims Directive (GCD) has placed greater emphasis on existing EU instruments such as the Packaging and Packaging Waste Regulation (PPWR) and the Empowering Consumers for the Green Transition Directive. While the PPWR governs the technical and environmental performance of packaging, covering aspects such as recyclability, compostability, and minimum recycled content, its scope is largely limited to mandatory labelling and design requirements. It does not regulate broader voluntary environmental marketing claims like “climate neutral” or “green packaging,” which were meant to be addressed by the GCD. As a result, oversight of such claims now falls primarily under general consumer protection law, particularly the Unfair Commercial Practices Directive (UCPD) and the newly adopted Empowering Consumers Directive. These instruments are expected to work in tandem with the PPWR, closing the regulatory gaps that remain in areas such as generic green claims and carbon offset disclosures. While PPWR remains the backbone of packaging-specific compliance, the evolving landscape now demands that companies navigate multiple legal regimes to ensure both environmental performance and truthful marketing communications are fully aligned and defensible.

The EU’s decision to withdraw the GCD is not a green light to relax, it’s a call to refocus. For companies genuinely committed to sustainability, this moment is about owning your impact and building strategic trust. In a world increasingly skeptical of greenwashing, leadership belongs to those who act with integrity, clarity, and impact. The tools exist. The risks are real. And the opportunity, for credibility, loyalty, and market differentiation, has never been greater. The Green Claims Directive may be gone, but the expectations it embodied remain. For forward-looking companies, that is not a regulatory burden, it is a competitive advantage in waiting.