The EU continues its sustainability rollback

Bumper week for the EU’s sustainability cull, with developments on the Green Claims Directive, CBAM and the Batteries Regulation 

(For the latest on the EU simplification omnibus covering CSRD and CS3D, read our dedicated weekly summary.)

On Friday, Real Economy Progress reported on the European Commission’s shock decision to shelve the Green Claims Directive in the face of pushback from conservative politicians.

Just days before the final political negotiations, a spokesperson confirmed it would withdraw the legislative proposal, meaning companies won’t be required to provide evidence backing-up environmental claims they make to customers.

It doesn’t let firms off the hook, though, because they are still governed by the long-standing Unfair Commercial Practices Directive, which targets all forms of mis-selling.

More directly, the directive for Empowering Consumers for the Green Transition (ECGT), introduced last March, remains in place.

At the time it was announced, European Parliament described ECGT as forbidding “vague environmental claims… meaning that companies will no longer be able to declare that they are ‘green’ or ‘environmentally friendly’ if they cannot demonstrate that they are”.

The rules are scheduled to come into force from 27 September 2026.

In the meantime, there will be backlash against the Commission’s decision to abandon the Green Claims Directive.

MEP Delara Burkhardt, one of Parliament’s lead negotiators on the file, said on Friday that she felt “deep concern” about the news, which she claimed came “without prior warning or explanation” and “undermines the role of the co-legislators”.

“The Commission has cited concerns from some political groups who have indicated they will note support the outcome,” Burkhardt wrote on LinkedIn.

“However, it is not the role of the Commission to pre-empt the democratic process or […] to make political calculations that short circuit the proper legislative process.”

She added that she would fight to get the negotiations back on track.

Stop the clock on batteries regulation

In another effort to reduce European companies’ sustainability obligations, lawmakers took a step closer to delaying due diligence rules under the EU Batteries Regulation this week.

Member states approved Council’s negotiating position on the proposed ‘stop-the-clock’ for the requirements, paving the way for a two-year postponement to the date of application, to August 2027.

Under the regulation, battery producers must publicly report on their due diligence practices to prevent or reduce batteries’ adverse green impacts, but they want more time to prepare.

Parliament still has to agree its position on the plan, which is part of the ‘Omnibus IV’ package adopted by the Commission last month.

CBAM 

An agreement was also reached this week on the “radical simplification” of the Carbon Border Adjustment Mechanism (CBAM).

In an announcement on Wednesday, Wopke Hoekstra, the commissioner for climate, net zero and clean growth, said the deal between the Commission, Parliament and Council had been reached “by political standards, at least, in record time”.

After less than four months of discussions, legislators agreed to reduce the coverage of CBAM by taking 90% of companies out of scope.

Hoekstra said it was “a great leap forward, but more be done in the domain of CBAM and in the domain of simplification”.