As the climate crisis is accelerating and the pressure to act is steadily increasing, many companies are claiming themselves or their products to be carbon neutral. This is usually achieved by offsetting residual emissions with carbon certificates (carbon offsetting). However, recent revelations about the inadequate quality of carbon credits as well as legal uncertainties surrounding the use of such offset claims are increasingly raising doubts about this approach. 

A recently published “Wuppertal Report” policy brief examines how the EU can promote integrity in corporate climate action: Taking into account the new framework of the Paris Agreement, the paper outlines various options for how the EU could push for more integrity and effectively combat greenwashing through the targeted use of Article 6 of the Paris Agreement.

In their recommendations, the authors advocate addressing the most serious consequences of ongoing offset practices through increased regulation of offset claims. If a ban on offset claims cannot be implemented, claims requirements and carbon offset regulations should be further specified, for example by prohibiting any type of double counting of emissions reductions. In addition to tightening the rules for corporate offset claims within Europe, the EU could help partner countries make informed decisions when approving climate change mitigation measures and respective carbon credits. The report also emphasizes the EU's special role in international climate negotiations, where it should advocate for a strong legal framework for climate action under Article 6.

The policy brief can be downloaded for free via the link below.