The European Union’s plan to introduce strict rules requiring companies to substantiate environmental claims—the so-called EU greenwashing law—now stands in flux.

While the revised draft of the Green Claims Directive (GCD) is still alive, progress is stalled and its future will depend on a key change: excluding micro-enterprises from the law’s scope.

Meanwhile, the separate Empowering Consumers for the Green Transition Directive (ECGT) has been adopted and is moving towards national implementation, meaning businesses in the packaging and consumer goods sectors must still prepare for new obligations around green claims.

Proposed directive under review as micro-enterprise exemption becomes deal-breaker

The GCD was originally proposed in March 2023 with the aim of ensuring that companies selling products or services in the EU can only use environmental claims if those claims are backed by recognised scientific methods and verified by independent bodies.

The proposal covers claims like “made from recycled materials”, “climate neutral” or “lower emissions”, and also seeks to bring tighter controls on eco-labels.

However, negotiations stalled in June 2025 when the European Commission (EC) signalled it would withdraw the proposal if micro-enterprises were included within its scope — that is, companies with fewer than 10 employees and under €2 million in annual revenue.

On 1 July the Commission clarified that the GCD had not been withdrawn, but progress depends precisely on this exemption.

Because micro-enterprises, plus small enterprises, account for around 98 % of all companies in the EU, their inclusion or exclusion is a major pivot point in the law’s future.

At this time, the GCD remains paused: the Council and Parliament have yet to reach agreement, and the proposed timeline suggests finalisation may now slip into 2026, with full application possibly in 2027 or 2028.

Broader anti-greenwashing rules press ahead despite pause

While the GCD is in limbo, the ECGT Directive has been adopted and binds EU member states to transpose it into national law by September 27, 2026.

The ECGT (which amends the Unfair Commercial Practices Directive) brings several new requirements: banning generic environmental claims like “eco” or “green” unless excellent environmental performance is demonstrably certified; prohibiting claims of climate neutrality based solely on offsetting; forbidding un-certified sustainability labels; mandating durability and reparability information at point of sale; and setting tighter standards for claims about future environmental performance.

National authorities across the EU are already taking enforcement action under the current framework, including investigations of companies for unsubstantiated “green” messaging.

For packaging manufacturers and brand owners operating in the EU market, this means that even in the absence of the GCD, green claims scrutiny remains real and rising.

What this means for businesses in the global packaging value chain

For companies in the packaging sector—material suppliers, converters, brand owners selling goods in the EU—the current regulatory mix brings both risk and clarity:

• Even though the GCD’s final text remains uncertain, the ECGT rules are firm and will apply from late 2026. Businesses must act now if they use environmental claims on packaging, labels or marketing.
• Any use of vague environmental terms (for example “eco-friendly”, “sustainable”, “carbon neutral”) will increasingly attract regulatory scrutiny, especially if unsupported by evidence, lifecycle data or independent verification.
• If the GCD eventually proceeds, its requirements for science-based substantiation and prior independent verification will raise the compliance bar even higher. Preparing systems for verification, data-collection and audit trails may give a competitive compliance advantage.
• Conversely, if the GCD is withdrawn or substantially watered-down due to the micro-enterprise exemption, businesses may face a regulatory environment with less harmonised rules — but national enforcement and evolving case law mean the “regulatory burden” may simply shift rather than disappear.

In short, while the EU green claims regulation faces an uncertain future, companies cannot afford to delay.

The future is now: firms should build transparent, verifiable environmental claims, audit their sustainability messaging and prepare for stricter oversight in the packaging and consumer-goods arena.