EU Commission Abandons Anti-Greenwashing Law

On June 20, 2025, the EU Commission announced that, following pressure from conservative lawmakers, it would withdraw new legislation targeting greenwashing.  Specifically, the Green Claims Directive--which would compel businesses to independently verify the environmental credentials of their products--was objected to by the center-right European People's Party, based upon arguments that it was unduly burdensome, especially for small businesses.  (The more liberal members of the current coalition objected to the withdrawal of this legislation, and subsequent discussions are continuing, although it appears unlikely that any legislation similar in scope to the Green Claims Directive will be enacted in the near future.)  Regardless of whether a more modest version of this anti-greenwashing law is ultimately enacted, the fundamental principle reflected by this development remains constant: the EU is currently retreating from the more aggressive climate agenda it had previously propounded.

This regulatory shift has been apparent over the past few months, most notably including the EU Omnibus bill that delays and reduces the scope of the EU's climate disclosure regulations.  In part, this development is likely due to the increased prominence of climate skeptics in politics, reflecting the rise of right-wing populism in both Europe and the United States.  The impact of the U.S. retreat from climate regulation should also not be under-emphasized; to preserve competitiveness with the United States, there has likely been greater pressure to remove or weaken regulations perceived as unduly burdensome when compared with alternative legal regimes.  But even if the reasons for this regulatory retreat can be understood, the impact of these changes--particularly with respect to incentives for future development--remains unclear.