Previously, a few green slogans, an "Eco" label, or the purchase of a few carbon credits were enough to package ordinary goods as eco-friendly products and sell them in Europe. Starting today, this "greenwashing" shortcut has been blocked.
On September 27, the EU Empowering Consumers for the Green Transition Directive (hereinafter referred to as the "Directive") officially came into effect. Rather than simply adding a new entry permit at customs or requiring companies to obtain a new certification, it amends the EU Unfair Commercial Practices Directive and the Consumer Rights Directive to specifically regulate how companies communicate the environmental friendliness, durability, and repairability of their products to consumers.
Original Text of the EU Empowering Consumers for the Green Transition Directive
Going forward, an unsubstantiated "green" claim in an advertisement could trigger a cascade of consequences: product pages being taken down, advertisements and labels withdrawn, already printed packaging requiring re-covering, consumer lawsuits, and hefty fines from regulatory authorities. For widespread infringements involving multiple member states, the maximum fines stipulated by national laws must amount to at least 4% of the company's annual turnover in the relevant member states; where turnover data is unavailable, the maximum fine must be at least EUR 2 million.
While a 4% fine is not easily imposed, it transforms "greenwashing" from a matter of public controversy into a core business operational issue.
From CE compliance, REACH chemical regulation, and RoHS restriction of hazardous substances, to a series of requirements such as eco-design and repairability, Europe has extended its scrutiny of products entering its market from "whether they work" to "how long they last and how they are recycled". This Directive adds another layer of inquiry: can companies provide evidence for their own claims?
Quality and cost remain the foundation for products and services entering the European market. However, the proportion of recycled materials, emission reduction processes, software update durations, and their corresponding models and batches are emerging as new thresholds for Chinese companies going global in the next phase.
One Directive Closes Four "Green Shortcuts"
Although the Directive officially takes effect today, its origins trace back seven years. Following the proposal of the "European Green Deal" in 2019, the EU incorporated the circular economy and consumer participation in the green transition into its action plan in 2020, proposed a draft in March 2022, and adopted the Directive in February 2024. March 27 of this year marked the deadline for member states to complete the transposition into national law; it is only today, September 27, that the Directive becomes uniformly applicable.
The core driver for this legislation is not a lack of green information in the European market, but rather that such information is too abundant, chaotic, and difficult to verify. Research by the European Commission found that 53% of environmental claims are vague, misleading, or unsubstantiated, and 40% lack supporting evidence. There are already 230 sustainability labels and 100 green energy labels in the EU market, yet nearly half of them lack effective verification.
"Greenwashing" could already be illegal in Europe previously, but it typically required a case-by-case assessment of whether a specific claim misled consumers. The massive workload involved left room for interpretation regarding what constitutes "greenwashing". The most significant change in the new Directive is the direct inclusion of a range of high-frequency practices into a "blacklist".
The first practice is drawing conclusions without defining the scope. General claims such as "green," "eco-friendly," "climate-friendly," and "biodegradable" can only be used if the company can demonstrate corresponding excellent environmental performance. Companies are also prohibited from printing "eco-friendly" on the front of the packaging while hiding the qualifying conditions in a QR code; in principle, relevant explanations must clearly appear on the same packaging, advertisement, or sales page.
Companies are not entirely barred from discussing environmental protection. "Climate-friendly packaging" is too vague, whereas "100% of the energy used to produce this packaging comes from renewable sources" is verifiable. The Directive targets those borderline claims that merely leave a green impression without clearly specifying what exactly makes them "green."
The second practice is inventing proprietary green certifications. "Sustainability labels" must either be established by eligible public authorities or be based on a certification scheme with publicly available rules, fair access, and oversight by an independent third party. Government endorsements from non-EU countries do not automatically qualify for exemptions; Chinese companies going global to Europe must independently prove that their systems meet these criteria.
The third practice involves the "clever trick" of substituting the whole with a part, or replacing actual emission reductions with offsets. For instance, the Directive stipulates that if only the packaging uses recycled plastic, the entire product cannot be labeled as a "recycled product"; purchasing carbon credits outside the value chain cannot render a product or a flight "carbon neutral." Promoting goals such as "achieving net zero by 2030" remains permissible, provided that quantified plans, timelines, and resource commitments are presented and subjected to independent verification.
The fourth practice directly targets product lifespan. For example, the common issue of mobile phone performance degrading after a system update can no longer be vaguely glossed over as it is today. Following the implementation of the Directive, mobile phone manufacturers must explicitly inform consumers in advance, or else they risk facing hefty fines. The Directive requires companies not to conceal that software updates may degrade device performance, nor to frame feature-only updates as mandatory installations. Furthermore, companies cannot market unrepairable goods as repairable, induce consumers to replace consumables prematurely, or baselessly claim that third-party spare parts will damage the product.
In fact, Europe has already been enforcing regulations along these lines in advance. For example, Zalando has removed "sustainable" flags, tree, and green leaf icons next to products, replacing the filtering criteria with specific materials and proportions; in 2025, 21 airlines also committed to removing phrases suggesting that "consumers can pay a fee to offset the emissions of a specific flight."
Therefore, the new regulations govern not only advertisements but also bring R&D, software, after-sales service, and spare parts supply into the consumer protection framework.
B2B Evades Direct Enforcement, But Not Purchase Orders
Following the implementation of the Directive, the impact on Chinese companies will be substantial. In 2025, the EU imported EUR 559.4 billion worth of goods from China, a year-on-year increase of 6.4%, accounting for 22.3% of the EU's total imports. That same year, the number of low-value e-commerce parcels entering the EU reached 5.9 billion, accounting for over 97% of all incoming parcels, the majority of which originated from China. Although the Directive does not explicitly target China, the massive export volume means Chinese companies will bear the brunt of the impact.
However, in 2025, EU customs conducted an average of only 65 interventions per 1 million imported goods. Given such a massive volume of goods, it is impossible for Europe to ensure the Directive's implementation solely through piece-by-piece customs inspections. Therefore, current enforcement is likely to focus on platform pages, advertisements, and packaging, subsequently passing the requirements upstream via platforms and retailers.
The first to be affected are Chinese consumer brands, independent websites, and cross-border e-commerce sellers. With numerous SKUs and rapidly copied copywriting, a single "eco-friendly fabric" template might be applied to thousands of products. If the template contains an error, the entire product catalog requires rectification.
SHEIN has already been under scrutiny. In May 2025, the EU Consumer Protection Cooperation Network listed "misleading sustainability claims" as one of its investigation targets, and the probe is still ongoing. Following the implementation of the Directive, to mitigate their own risks, these platforms are highly likely to proactively clean up their pages and demand substantiation during the product listing process.
The second category of high-risk companies comprises consumer goods businesses that rely on green selling points, such as those in apparel, cosmetics, food and beverage, home goods, and packaging. If a garment contains 20% recycled fiber, stating the proportion is acceptable, but it cannot be directly marketed as "recycled clothing"; if a bottle is made of 100% recycled plastic but the cap and label are not, the entire bottle cannot be labeled as "100% recycled plastic"—the scope must be clearly specified.
Moreover, even if the packaging was already produced when the Directive took effect, the original claims cannot be used indefinitely. The compromise solution provided by the European Commission is to use stickers to cover the claims or add supplementary explanations next to the shelves as a transitional measure.
The third category includes manufacturers of mobile phones, home appliances, printing equipment, and smart hardware. They may not frequently use "green" claims, but they will be impacted by rules regarding software updates, repairs, consumables, and spare parts. Whether updates will slow down the device and whether third-party consumables will affect performance—such relevant information must be clearly communicated to consumers; otherwise, it easily constitutes a violation.
Although the Directive has a broad scope, it primarily regulates B2C commercial practices. The good news is that B2B companies that solely sell raw materials, components, and industrial equipment to European businesses, without directly marketing to ordinary consumers, are not directly subject to regulatory oversight. The bad news is that these B2B companies will face more complex customer scrutiny. As European brands need to substantiate the proportion of recycled materials, energy sources, and repair capabilities, they will demand data from Chinese suppliers and incorporate claim errors and rectification costs into procurement contracts. In the past, submitting a BOM (Bill of Materials) and test reports might have sufficed; going forward, customers will also demand to know which specific SKU, raw material batch, and factory the data corresponds to.
Europe Relaxes ESG Reporting, But Shifts Responsibility onto Every Single Product
For companies, the simplest response is to say less. Removing terms like "eco-friendly," "green," and "sustainable" from packaging and web pages can rapidly reduce risks, but the prior investments in green electricity, energy-saving processes, and recycled materials cannot be translated into product price premiums.
A better approach is to replace adjectives with data, and then link that data to specific products. Companies need to audit their product names, packaging, platform labels, and advertisements, clarifying whether each statement describes the packaging, materials, production processes, or the entire product; testing, certification, and supply chain data must be mapped to specific SKUs and batches.
It is also important to avoid a misinterpretation here: the new Directive does not require all specific environmental claims to obtain third-party certification in advance. As long as the data is accurate, the scope is clear, and there is sufficient evidence, the absence of an eco-label does not automatically constitute a violation.
Nevertheless, the Directive will still benefit businesses along the European industrial chain for certification, testing, and data services. It is understood that TÜV SÜD has launched training programs, ISCC has commissioned a law firm to evaluate its own system, and both OEKO-TEX and the International EPD System have released applicable guidelines.
Providers of product carbon footprint, life cycle assessment, and supply chain data services will also see increased demand. What companies need is not just an ESG report, but a product data system capable of answering, "What is the basis for this claim?"
This precisely creates the most interesting contrast in current European ESG policies. In February this year, the EU just narrowed the scope of its corporate sustainability reporting and due diligence rules: the CSRD (Corporate Sustainability Reporting Directive) primarily covers companies with over 1,000 employees and an annual net turnover exceeding EUR 450 million; the CSDDD (Corporate Sustainability Due Diligence Directive) threshold was raised to over 5,000 employees and an annual net turnover exceeding EUR 1.5 billion, and the obligation for climate transition plans was also removed.
On the surface, Europe appears to be relaxing ESG constraints. In reality, however, the EU is transmitting ESG requirements from corporate-level reporting down to every stage of product sales. Corporate-level ESG reporting is costly and broad in scope; to maintain competitiveness, Europe had to reduce the number of companies required to file reports. Yet, restricting "greenwashing" directly impacts consumers' purchasing decisions. To remain competitive, companies actually have to do more.
However, this is not solely a source of pressure for Chinese companies. China already possesses large-scale manufacturing and energy-saving retrofit capabilities in sectors such as home appliances, electronics, textiles, energy storage, and packaging. Only by mapping green electricity, materials, and process data to specific products can manufacturing advantages be transformed into brand and pricing advantages. This will directly compel a batch of Chinese companies to step out from behind the scenes and into the spotlight.
Europe has not abandoned ESG; it has simply shifted green competition from whether companies can tell a good story to whether every single product can provide evidence. Whether companies are kept out by the new regulations, or leverage this round of rule reshaping to turn the low-carbon capabilities of Chinese manufacturing into a new market advantage, depends on whether they can ensure that every green investment made in the factory corresponds precisely to every product on the shelf.