A miscommunication arose after a European Commission spokesman suggested the Commission was intending to abandon the Green Claims Directive on 20 June 2025, one day before the interinstitutional negotiations between the Council and the Parliament.

The timing of the statement appeared to respond to a letter from the European People’s Party (EPP), the Parliament’s centre-right group, addressed to Environment Commissioner Jessika Roswall. In the letter, the EPP called on the Commission to withdraw the directive, stating:

“<…> we hold the considered view that the GCD risks unduly hindering sustainability communication through procedures that are overly complex, administratively burdensome, and costly.” 

Such a timeline gave the impression that the EPP-dominated Commission (Ursula von der Leyen hails from the center-right political family) gave in to the demands from its allies in the Parliament.

Without the EPP’s support, the largest group in the Parliament, the legislative file would not gain enough support; furthermore, the rightist parties have been siding with the EPP to pass deregulatory legislation. This effectively reduces the chances of the directive being passed without caving in to the right-leaning parties’ demands.

Following the news, Italy retracted its support for the Green Claims Directive. As a result, the trilogue negotiations originally set for 23 June were cancelled. The Polish Presidency of the Council has since paused all negotiations, though discussions may resume under the Danish Presidency, which takes over on 1 July 2025.

The text could still make a comeback but in a revised form, provided that micro-enterprises are exempt from its scope, as the Commission aims to slash red tape in line with commitments under the Better Regulation Agenda and the Competitiveness Compass. The intention is to put the brakes now rather than later to avoid a situation where the text will need further revision through simplification omnibuses (as is currently the case with the sustainability reporting rules and the Carbon Border Adjustment Mechanism). This was confirmed by the Commission on 22 June 2025.

Already on 23 June 2025, the Parliament’s representatives said they supported the Commission’s suggestion and urged EU countries to come back to the negotiating table.

In the event that the Commission decides to withdraw the directive, it would need to be approved by the College of Commissioners. The next weekly meeting is scheduled for 25 June 2025.

Market impact

Veyt’s assessment suggests that the Green Claims Directive is not off the table – the Commission is likely to introduce amendments to the proposed text – after which the trilogues might resume. Albeit the timeline is not clear – the file has been moving through the legislative process since 2023.

This episode has had notably bearish consequences for the voluntary carbon market. Many companies were already adopting a “wait-and-see” approach, refraining from any public environmental claims (so called greenhushing) out of concern they could be scrutinised under vague or misaligned regulations.

The latest developments exacerbate this uncertainty. With the Green Claims Directive shelved – at least temporarily – and further delays likely, companies are left in limbo. The absence of legal clarity and harmonisation hampers progress, discouraging companies from investing in carbon credit use.

On the other hand, the Empowering Consumers for the Green Transition (ECGT) directive remains in place. From September 2026, vague or unverified environmental claims – such as “green” or “eco-friendly” – will be prohibited unless companies can substantiate them with credible evidence. The Unfair Commercial Practices Directive also continues to target misleading environmental marketing.

The Green Claims Directive would have complemented these laws by providing much-needed legal clarity and standardisation across EU markets. Its delay adds to the mounting pressure on other key initiatives—such as the EU Deforestation Regulation (EUDR), the Corporate Sustainability Due Diligence Directive (CSDDD), and the Corporate Sustainability Reporting Directive (CSRD) – all of which face political headwinds, dilution, and postponement.

The uncertainty is compounded by the fact that the Carbon Removal Certification Framework (CRCF) initially referenced the Green Claims Directive to define permissible use cases for carbon removals. With that anchor removed, the regulatory pathway for how carbon removals can be credibly framed and communicated becomes increasingly opaque.

Conclusion

The Green Claims Directive delay leaves companies in limbo and in a fragmented regulatory landscape. Without the coherence it promised, firms must now contend with overlapping but inconsistent frameworks, further discouraging transparency and slowing climate action.