Carbon neutral claims

“Carbon neutral” is one of the most common claims made after buying carbon credits, and one of the most challenged. This page explains what the phrase means, how the rules treat it in the EU, the UK and the US, and the claims that hold up better. It is part of our claims and rules section.

What a carbon neutral claim says

A carbon neutral claim says that a product, a service or a business has no net impact on the climate. In practice, most such claims rest on buying and retiring carbon credits to cover the emissions that remain.

The Oxford Offsetting Principles note that “carbon neutral” has come to be read as a less rigorous, interim claim, in which an organisation buys credits to cover its remaining emissions, often well before it reaches net zero^{Source 7}. That gap between what the phrase seems to promise and what usually sits behind it is why regulators focus on it.

How the rules treat it

European Union

From 27 September 2026, EU consumer law bans claims, based on the offsetting of greenhouse gas emissions, that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions^{Source 3}. The directive gives “climate neutral”, “CO₂ neutral certified” and “carbon positive” among its examples, and says such claims should only rest on the product’s actual lifecycle impact^{Source 3}. Our guide to the EU green-claims ban covers the details.

United Kingdom

The CMA’s Green Claims Code asks businesses to be clear about whether, and how far, they are reducing their own emissions or offsetting. Where they offset, they should give information about the scheme, which should be based on recognised standards and capable of objective verification^{Source 4}. Without that, it says, consumers could be misled into thinking that products or processes generate no emissions. Our page on UK rules covers the CMA and ASA guidance in full.

United States

The FTC’s Green Guides say carbon offset sellers should use competent and reliable scientific and accounting methods, and must not sell the same reduction more than once^{Source 5}. It is deceptive to imply that an offset represents reductions that have already happened when they won’t occur for two years or more without saying so, or to claim a reduction that the law already required^{Source 5}. See the FTC Green Guides for more.

Standards for neutrality claims

If you still want to claim carbon neutrality outside the EU’s product rules, use a recognised standard. ISO 14068-1:2023, Climate change management, Part 1: Carbon neutrality, published in November 2023, is the international standard on the subject^{Source 6}.

For companies with climate targets, the SBTi’s net-zero standard sets a higher bar. Net zero means cutting emissions to a residual level in line with 1.5°C pathways and permanently neutralising what remains, and credits don’t count as reductions towards science-based targets^{Source 9}. Version 2.0 of the standard, published in June 2026, keeps that rule^{Source 1}. Target validation under Version 2.0 starts in Q1 2027, and Version 1.3.1 remains available for target setting until 31 January 2028^{Source 2}. Read net zero vs carbon neutral for how the two terms differ.

Why the phrase misleads

The problem isn’t buying credits; it is what the word “neutral” suggests. A consumer reading “carbon neutral” on a product may reasonably think the product causes no emissions. In most cases the product still causes emissions, and the claim depends on credits from projects elsewhere.

Those credits vary in quality, too. Some represent real, lasting cuts or removals; others have been over-credited or count reductions that would have happened anyway. When the claim rests on weak credits, the gap between what it says and what happened grows. The EU directive makes this point directly: offsetting emissions outside a product’s value chain is not equivalent to reducing the product’s actual lifecycle impact^{Source 3}.

There is also a timing issue. US guidance treats it as deceptive to imply that an offset’s reductions have already happened when they won’t occur for two years or more, unless that is clearly disclosed^{Source 5}. A “neutral” claim built on future reductions can therefore mislead even if the credits are genuine.

Better alternatives

These contribution claims describe what you did without saying it cancels out your emissions. The Oxford Principles recognise that credits can be bought and retired as climate action beyond your value chain, without being used as an offset^{Source 7}. VCMI’s Claims Code builds on the same idea: set reduction targets first, then buy high-quality credits from outside your value chain^{Source 8}.

If you still use the word

Outside the EU’s product rules, some businesses still want to describe themselves as carbon neutral. If you do, make the claim specific and checkable: name the period and the emissions it covers, show your own reductions separately, follow a recognised standard such as ISO 14068-1^{Source 6}, and publish the retirement records for every credit. In the UK, the CMA expects you to explain whether you are reducing or offsetting and to give details of the scheme^{Source 4}.

A checklist before you make any claim

1. Measure the emissions the claim covers, and say which ones.
2. Show your reductions separately from any credits.
3. Name the credits: project, standard, vintage and registry serial numbers.
4. Link the retirement record, so anyone can check it.
5. Use plain words that describe what you did, not what you hope it means.

If you are buying credits for a business, our guides for small businesses and companies explain the buying side, and how to verify carbon credits shows how to check a retirement.