Carbon Neutral Claims and Communications

Are carbon neutrality claims still viable?

Since 27 September 2026 the EU has banned them on products where they rest on offsetting. In the UK they remain legal but exposed, and they are still common among SMEs, some fuelled by questionable labelling schemes. So what can you still say, and what does it take to defend it?

This page explains what ‘carbon neutral’ means, why the term so often misleads, how it differs from net zero, what credible practice looks like, where the regulators stand and what a defensible carbon claim requires. It’s a companion to our main guide to greenwashing; for the latest rulings and developments, see Greenwashing News.

Last updated 05/October/2026.

What ‘carbon neutral’ actually means

Carbon neutrality applies to a product, service or organisation, and means balancing its emissions over a set period, whatever has not been reduced is matched by an equivalent quantity of carbon offsets. That balancing act is the crux of the problem, largely because it isn’t how most people understand the term.

ASA research published in 2022 found little consensus on what ‘carbon neutral’ and ‘net zero’ mean. The terms were often treated as synonymous, and both were frequently read as meaning a direct, absolute reduction in emissions. Many people, in other words, believe a ‘carbon neutral’ claim means a company is cutting its emissions now or will in the near future, and feel misled when they learn how much rests on offsets. In common practice, a great deal does, and that mismatch is why the claim so readily misleads.

Carbon neutral, net zero and climate positive – what’s the difference?

A large part of the problem is that these terms are used interchangeably when they mean quite different things. Getting the distinctions right is the first step towards communicating honestly.

• Carbon neutral means a balance between the emissions associated with a product, service or organisation and an equivalent amount of reductions and offsets. In practice, the balance can be struck with very little actual reduction and a significant amount of offsetting, which is why the term attracts suspicion.
• Net zero sets a much higher bar. It means deep, absolute decarbonisation across Scopes 1, 2 and 3, typically cutting emissions by around 90% in line with climate science, with only the hard-to-abate residual neutralised through carbon removals. Carbon credits do not count towards the reduction targets themselves. Two developments in June 2026 firmed this up: the SBTi published version 2.0 of its Corporate Net-Zero Standard, and ISO released its first draft net zero standard, ISO 14060, with final publication expected in late 2026 or early 2027. Net zero is a destination reached largely by cutting emissions; carbon neutral can be reached largely by paying for them elsewhere.
• Climate positive and carbon negative claims go further still, asserting that more carbon is removed than emitted. They set the highest evidential bar of all and, unsurprisingly, are among the most frequently challenged.

‘Carbon neutral’ and ‘net zero’ are not synonyms, and treating them as such is one of the most common ways an otherwise well-meaning claim slides into greenwashing. most common ways an otherwise well-meaning claim can slide into greenwashing.

The offsetting credibility problem

Both scientific and public opinion have, to some extent, turned against carbon neutrality as it’s commonly practised. Climate scientists are clear that dramatic, absolute reductions in emissions are what’s needed. Against that backdrop, numerous investigations have lifted the lid on carbon-offsetting schemes and shown that many fail to deliver real or lasting emissions reductions. The result has been a crisis of confidence and a broader backlash against offsetting.

When a consumer’s understanding of ‘carbon neutral’ doesn’t match what such schemes can be proven to deliver, you have the ingredients for deeper mistrust of environmental communication generally.

What credible practice looks like: reduce first, offset last

Scepticism about offsetting doesn’t make carbon claims impossible. It means they have to be built in the right order. The principle that now underpins both good practice and the formal standards is the mitigation hierarchy: reduce first, offset last.

• Reduce. The priority is always to cut your own emissions, across the full value chain, including Scope 3. Reductions inside your own operations and supply chain are sometimes described as insetting, to distinguish them from buying credits elsewhere.
• Then remove. For the residual emissions that cannot yet be eliminated, the next preference is removals, credits that take carbon out of the atmosphere, over avoidance credits, which claim to prevent emissions that would otherwise have occurred. The two are very different in quality and permanence, and conflating them is a common weakness in carbon neutral claims.
• Then offset, carefully. Any offsetting used to close the gap should rest on high-integrity credits. The reference points are the Integrity Council for the Voluntary Carbon Market’s Core Carbon Principles, which set quality criteria for credits, and the Voluntary Carbon Markets Integrity Initiative’s Claims Code of Practice, which sets out how companies can talk about their use of credits without overstating them. The UK Government’s 2025 consultation proposed endorsing both.

The order matters as much as the activity. A claim built on heavy offsetting with little underlying reduction may be ‘neutral’ on paper, but it is increasingly indefensible, both reputationally and, in the EU, legally.

A standard to certify against: ISO 14068-1

For organisations that want a formal, verifiable basis for a carbon neutrality claim, the standards landscape has changed. The long-standing British specification PAS 2060 has gone: BSI stopped verifying against it in January 2025 and withdrew it at the end of that year. Its successor is the first international standard for carbon neutrality, ISO 14068-1:2023 (‘Climate change management, Transition to net zero, Part 1: Carbon neutrality’).

The shift is more than a change of reference number. ISO 14068-1 embeds the reduction-first hierarchy described above, requires broader inclusion of material Scope 3 emissions, applies stricter tests to the carbon credits used, and builds on ISO’s existing greenhouse gas quantification and verification standards. Where PAS 2060 allowed neutrality to be reached largely through offsetting, ISO 14068-1 treats neutrality as a stepping stone on a path to net zero. If you intend to make a carbon-neutral claim and have it independently verified, this is now the standard to work to.

However, some caution is required. Verification to ISO 14068-1 strengthens an organisational claim, or a properly qualified claim in the UK. It does not rescue an offset-based product claim made to EU consumers, which is prohibited whatever standard sits behind it.

Where the regulators stand

The UK and the EU now sit in different places. The EU has banned the most common form of the claim outright. The UK still judges each claim on whether it misleads, but with far heavier penalties behind that judgement than it had two years ago.

United Kingdom

In the UK, the ASA and CMA work closely together on this agenda. Following its consumer research, the Committee of Advertising Practice (CAP) updated its environmental guidance in February 2023, in line with the CMA’s Green Claims Code. Advertisers should avoid unqualified ‘carbon neutral’ or ‘net zero’ claims, say whether and how far a claim rests on reduction or on offsetting, and give details of any offsetting scheme used.

The bigger change is enforcement. Since 6 April 2025 the Digital Markets, Competition and Consumers Act 2024 has let the CMA decide for itself whether consumer law has been broken, and fine a business up to 10% of global turnover, without going to court. Its first penalty under those powers, £4.2 million in April 2026, concerned drip pricing, but the CMA has named greenwashing as an enforcement priority. In January 2026 it published guidance on green claims across the supply chain, which makes clear that retailers answer for the claims they repeat as well as the brands that make them.

Whether offsetting can ever properly support a neutrality claim remains an open question. The Government consulted in 2025 on raising integrity in voluntary carbon and nature markets, including whether to define terms such as ‘carbon neutral’ officially or to create a claims standard with independent assurance. It published a summary of responses in March 2026 and promised its own response for summer 2026; at the time of writing, that response has not appeared. The ASA has said it is engaging with that work, so further guidance on what evidence can substantiate offset-based claims is likely to follow it.

European Union

The measure that matters most is the Empowering Consumers for the Green Transition Directive (the ‘ECGT’ or ‘EmpCo’ Directive, (EU) 2024/825). It entered into force in March 2024 and has applied across the EU since 27 September 2026, with no transition period. It bans generic environmental claims that can’t be substantiated and, critically for this topic, prohibits claims that a product has a neutral, reduced or positive climate impact where that rests on carbon offsetting.

Two further rules bear on carbon communication. Sustainability labels must be based on a certification scheme or set up by a public authority. And claims about future performance, such as ‘climate neutral by 2030’, need a detailed, realistic implementation plan that an independent expert verifies regularly.

The offset ban is specific to product claims. An organisation-level ‘carbon neutral’ claim is not caught by it directly, but it still has to clear the rules on generic claims and on misleading practices, and the case law below. Several member states missed the March 2026 deadline for writing the directive into national law, so enforcement will be uneven for a while. Treat that as a gap in policing, not a grace period.

A second, more far-reaching measure, the Green Claims Directive, would have required science-based substantiation and independent third-party verification of green claims, it was withdrawn in June 2025.

National courts have not waited. In June 2024, Germany’s Federal Court of Justice ruled that ‘klimaneutral’ (climate neutral) is inherently ambiguous, and that any company using it must explain what it means (reduction, offsetting, or both) within the advertisement itself, not via a QR code or a linked page. In August 2025, the Frankfurt Regional Court barred Apple from advertising the Apple Watch as a ‘CO2-neutral product’, because leases on most of the forestry land behind its offsets were secured only until 2029. Apple has since dropped the label.

Taken together, the ban on offset-based product claims and the national case law make the European position tighter than the UK’s, where a properly qualified carbon neutral claim can still, in principle, be made.

Operating across markets

The EU rules apply to any business marketing to EU consumers, wherever it is based, so UK companies selling into the EU are caught. That leaves businesses in more than one market with a choice: run different claims in different jurisdictions, or unify to the tougher standard. Most of our clients take the second route. A consistent approach and message avoids confusion and risk, and it future-proofs communications against rules that are converging in the same direction anyway.

Practice is already changing

The market moved before the law did. The Carbon Trust stopped offering its Carbon Neutral label in September 2023 and replaced it with more specific labels focused on carbon reductions. Apple, as noted above, has removed its carbon neutral branding. The direction is away from a single, easily misunderstood badge and towards claims that distinguish reductions from offsets.

But companies continue to get into trouble. The ASA monitors communications actively, including through AI tools, and also acts on complaints. Its 2023 rulings against BrewDog (‘carbon negative’) and Charles Tyrwhitt (‘100% carbon neutral’) set the pattern. Neither turned on the underlying ambition; both turned on a failure to make the basis of the claim clear in the advert itself. (We cover individual rulings as they happen on our Greenwashing News page.)

What makes a defensible carbon claim

The regulators are consistent on what carbon communication requires, and it’s no different in principle from the requirements for any other environmental claim:

• The basis of the claim must be very clear. A bare ‘carbon neutral’ or ‘carbon negative’ badge, unqualified, is likely to mislead.
• The claim must rest on evidence and accurate information, and the information a consumer needs to understand it must appear on the advert, or very close to it. Constraints of space or ad format are not, in the regulators’ view, a valid reason to omit it.
• The balance between actual reductions and offsets must be spelt out. Consumers should be able to see how much of a ‘neutral’ position comes from real reductions and how much from purchased offsets. Increasingly, the quality of those offsets matters too.
• Future goals require a verifiable delivery strategy. Any claim about future reductions must be underpinned by a credible, monitorable plan, not an aspiration. In the EU this is now a legal requirement, with independent verification. A science-based target (for example, one validated through the SBTi) is a far stronger foundation than a self-declared ambition.
• Check where the claim will be seen. A qualified, offset-based product claim that passes in the UK is prohibited in the EU. Packaging, websites and social media rarely respect that border.

A final note on authenticity

Beyond compliance, there’s a question of what’s authentic. As dramatic real-world emissions reductions become ever more urgent, it’s increasingly hard to argue that offsets alone can deliver the change required. The most credible carbon communication leads with reduction, is transparent about the role of offsets, and avoids absolute claims the evidence can’t support.

For many product-level claims, the most defensible course now is the simplest one: stop saying ‘carbon neutral’ altogether, and instead communicate specific, evidenced reductions, ‘we have cut the emissions of this product by X% since [year]’, alongside a credible target for the rest. It’s less eye-catching than a neutrality badge, but it is honest, harder to challenge, and increasingly what regulators and informed customers expect.