EU green claims penalties explained

Understand the EU Green Claims Directive, its fines for greenwashing, and compliance steps for businesses

The EU Green Claims Directive enforces strict rules on how companies present environmental claims to prevent greenwashing. Non-compliance can lead to severe penalties, including fines of up to 4% of annual EU turnover, revenue confiscation, and market access restrictions. These rules apply to all businesses targeting EU consumers, regardless of location.

Green claims requirements

All green claims must be:

• Supported by scientific evidence

• Undergo third-party verification

• Reviewed and updated every five years

These requirements aim to ensure environmental marketing is transparent, accurate, and trustworthy.

Penalty structure

Penalties depend on the severity and scope of the violation and include:

• Fines up to 4% of annual EU turnover

• Confiscation of revenue gained through misleading claims

• Operational restrictions or market bans

• Public exposure of violations

This structure highlights the importance of having strong internal systems to validate green claims and avoid reputational and financial risks.

Special allowances for small businesses

The directive offers flexibility for SMEs:

• Extra 12 months to comply

• Simplified procedures for basic claims

Micro-enterprises may be exempt unless they choose to opt in.

Green Claims Directive: protecting consumers from greenwashing

EU Green Claims law basics

The directive outlines specific categories and requirements for environmental claims:

Carbon offsetting can only be referenced after emissions reductions and must use EU-certified carbon credits.

Related EU laws

Where specific EU rules apply to sectors or product types, those take precedence. This directive is aligned with:

• Unfair Commercial Practices Directive (UCPD)

• Empowering Consumers for Green Transition initiative

• Sector-specific environmental regulations

These rules establish a framework for compliance, and failure to meet verification standards leads to penalties, which will be discussed in the following section.

Penalties overview

The EU Green Claims Directive introduces a tiered penalty system designed to prevent greenwashing and enforce accountability. These penalties are meant to deter misleading environmental marketing practices and ensure that businesses take sustainability communication seriously.

Financial penalties for greenwashing

Companies that fail to meet the directive's requirements may face:

• Fines of up to 4% of their annual turnover in EU markets. This applies especially to large-scale or cross-border violations.

• Confiscation of revenues directly linked to misleading green claims, preventing companies from profiting through non-compliance.

• Additional financial sanctions imposed by national authorities, depending on the member state’s enforcement policies.

These fines are not symbolic, they are designed to act as a clear deterrent and ensure all environmental claims are based on evidence and third-party verification.

Operational and legal consequences

Financial sanctions are only part of the risk. Businesses may also face:

• Public exposure of violations, which can damage consumer trust and brand equity

• Exclusion from public tenders and procurement processes in the EU

• Legal action from consumer protection agencies or NGOs

• Mandatory retractions or corrective statements on product packaging or marketing materials

• Temporary or permanent restrictions on market access for repeated offenders

How penalties are assessed

EU regulators will consider a number of factors when determining the appropriate penalty, including:

• The seriousness of the infringement – was the claim misleading, exaggerated, or entirely false?

• The scale and reach – did the claim affect consumers across multiple EU countries?

• The duration – how long did the non-compliant claim remain in use?

• Previous violations – repeat offenders will face tougher penalties

Together, these penalties create a strong incentive for businesses to adopt robust green claims verification processes. In the next section, we’ll explore what compliance looks like and how to stay ahead of enforcement actions.

Meeting compliance rules

All environmental claims must go through third-party verification within 30 days. Here's how the process works:

1 Initial Assessment
Companies must perform detailed evaluations using recognized EU or international scientific methods. This involves collecting data that covers the entire product lifecycle.

2 Documentation Preparation
Create documentation in an EU language that is accessible both digitally and in print. This must be updated every five years.

3 Third-Party Verification
Submit claims to accredited verifiers who will evaluate:

• The scientific credibility of the evidence

• Alignment with EU-approved methodologies

• Accuracy of environmental impact data

Platforms like Devera can help simplify this process. Devera automates ISO-aligned assessments, making LCA reporting more efficient and consistent.

Rules for small businesses

The directive includes special provisions for smaller businesses, as outlined below:

SMEs benefit from extra implementation time and simplified processes.

Using LCA software for compliance

Modern LCA software or Devera simplifies data collection and reporting while aligning with ISO 14040/44 and 14067 standards.

These tools and services help businesses measure carbon footprints across their product lifecycle. They generate standardized reports, compare performance against benchmarks, and provide reliable data for verifying environmental claims.

Look for software or services that includes:

Features that support compliance

• Automated data collection: Ensures accurate, up-to-date LCA

• Real-time monitoring: Detects issues early

• Standardized reporting: EU-ready formats

• Impact comparison tools: Validates performance and environmental claims

These features simplify compliance and reduce legal exposure.

Tracking regulatory changes

During the 2025–2026 implementation, the EU will introduce sector-specific methodologies.

Stay compliant by:

• Assigning regulatory leads

• Monitoring updates from the European Commission

• Joining industry associations

• Conducting quarterly internal audits

Internal review setup

In addition to using software or services, structured internal processes are essential for maintaining compliance.

Follow these steps:

1. Form a Cross-functional Team

Create a review committee with members from legal, marketing, and sustainability departments. This team should regularly assess proposed environmental claims.

2. Set Up Verification Checkpoints

Establish approval workflows that require specific sign-offs at each stage. Keep all decisions and supporting data in a centralized system.

3. Maintain Comprehensive Records

Ensure documentation includes:

• Data supporting environmental claims.

• Results from third-party verifications.

• Internal review outcomes.

• Updates to marketing materials.

This detailed record-keeping demonstrates your due diligence if regulators request evidence.

Conclusion

The earlier sections highlight the importance of strong technical and operational systems for meeting compliance standards. The EU Green Claims Directive sets strict rules for environmental marketing claims, requiring companies to back their claims with solid scientific proof and consider the entire lifecycle of their products.

To comply, businesses must integrate technical solutions and provide evidence-based claims. The short timeline for preparation means organizations need to quickly align their processes with these new rules.

Tools like Devera simplify this process by offering real-time carbon footprint tracking and standardized reporting that meets ISO standards. These technologies help businesses keep accurate records while keeping up with changing regulations.

The directive’s impact extends beyond the EU, raising the bar for environmental marketing worldwide. By enforcing verified claims and consistent reporting, it establishes a new level of accountability for businesses everywhere.

FAQs

What is the fine for greenwashing in the EU?

Fines under the directive start at 4% of a company's annual EU turnover. Other penalties may include exclusion from public tenders and confiscation of revenue gained through misleading claims. For detailed information, check the Penalty Levels section above.

Are small businesses exempt from these penalties?

The directive includes specific rules based on company size:

• Micro-enterprises (fewer than 10 employees and less than €2M turnover) are fully exempt unless they choose to participate voluntarily.

• SMEs are given an additional 12-month grace period to comply compared to larger companies.

What verification is needed before making environmental claims?

Companies must meet these requirements:

• Claims must be pre-approved by accredited verifiers within 30 days.

• All environmental statements must be backed by scientific evidence.

How does the directive handle carbon offsetting claims?

There are clear restrictions on how carbon offsets can be communicated:

• Claims cannot rely primarily on carbon offsets.

• Offsets can only be mentioned after companies have maximized direct emissions reductions.

• Only EU-certified carbon credits can be referenced.

"The directive maintains the existing ban on claims entirely based on carbon offsetting. However, companies that use carbon offsets or removals as a complementary measure, after reducing their footprint 'as much as possible,' may mention these activities in their advertising."

What steps ensure compliance with the new rules?

To stay compliant, companies should:

• Conduct a thorough review of all current environmental claims.

• Train staff on the directive's requirements.

For more details, see the Steps to Follow the Rules section.