EU regulation

The 2026 EU landscape: three texts, three logics

Three texts now structure the European carbon framework, each with a distinct role. CSRD imposes transparency in climate reporting on companies above a certain threshold. The ECGT Directive frames the claims used in communication, especially those based on offsetting. The CRCF Regulation builds EU-level certification of carbon removals on the supply side. Understanding these three pillars is what tells you exactly what applies to your company depending on its scope and markets.

CSRD: the foundation of sustainability reporting

The Corporate Sustainability Reporting Directive (CSRD), published in late 2022, requires in-scope companies to publish an audited sustainability report following the European Sustainability Reporting Standards (ESRS) issued by EFRAG. It replaces the NFRD and broadens the scope of expected information: governance, climate risks, transition plan, GHG emissions by scope, human resources, biodiversity. The report must be audited by a statutory auditor or an approved independent third-party assurance provider, and published in the management report. This turns sustainability into a topic auditable on the same footing as financial accounts.

Omnibus I: narrowed scope in 2026

The Omnibus I directive, adopted by the Council on 24 February 2026 and entered into force on 18 March 2026, significantly modifies the initial scope. Only EU entities employing more than 1,000 staff AND with net turnover above 450 million euros are now concerned. Member States have 12 months to transpose (deadline March 2027), with first-time application to financial years beginning on or after 1 January 2027. Concretely, about 80% of the originally in-scope companies fall out of the regime. A simplified version of the ESRS is expected within six months of Omnibus, following a Q2 2026 public call for feedback. The 2024-2028 wave schedules published before Omnibus are now obsolete: rely on this new frame instead.

ESRS E1: the climate standard, point by point

Within the ESRS, the sector standard E1 (Climate change) is the one structuring all carbon topics. E1-1 (transition plan) expects a strategy consistent with a 1.5°C trajectory, with decarbonisation scenarios and associated CapEx. E1-2 (policies) requires describing climate policies. E1-3 (actions) requires a list of concrete actions taken. E1-4 (targets) imposes quantified reduction targets, baselines and a measurable trajectory. E1-5 (energy) covers consumption and mix. E1-6 (GHG emissions) requires gross transparency on scopes 1, 2 and 3 by category, with methodologies used and uncertainties. E1-7 is then the key disclosure for carbon credits.

ESRS E1-7: what you must document about your credits

E1-7 ('GHG removals and GHG mitigation projects financed through carbon credits') is the CSRD point specific to carbon credits. For each credit used, you must document: volume in tCO₂e, typology (removal vs avoidance), project geography, certification standard (Gold Standard, Verra, ISO 14064-2, Label Bas-Carbone, etc.), vintage, status (purchased, retired), retirement number on the registry, and articulation with the reduction trajectory. Any neutrality claim must be backed by verifiable evidence. Without this level of detail, the auditor can issue a reservation on the climate section of the report, which sends a strong negative signal to investors.

ECGT: anti-greenwashing comes into force

The ECGT Directive (Empowering Consumers for the Green Transition), adopted in 2024, had to be transposed by Member States before 27 March 2026. It applies from 27 September 2026, with no transition period for existing claims. It bans product-level claims based on offsetting: 'carbon neutral', 'CO₂ neutral', 'climate positive', 'zero emissions'. It also bans generic claims ('environmentally friendly', 'green', 'biodegradable', 'eco-responsible') not backed by recognised certification. It applies to any trader selling to EU consumers regardless of headquarters, creating strong extraterritorial reach. Penalties are framed at national level, but must be 'effective, proportionate and dissuasive' per the directive.

What remains possible at corporate level

ECGT targets product-level claims. At corporate level, contribution claims remain possible, provided they are documented and embedded in a credible reduction trajectory. The VCMI framework (Voluntary Carbon Markets Integrity Initiative) offers three tiers (Silver, Gold, Platinum) depending on trajectory ambition and credit quality. The defensible language is that of 'contribution to financing the climate transition', not 'neutrality'. In practice, replace 'our product X is carbon neutral' with 'we contribute to financing Y climate projects for Z tCO₂e per year'. This formulation passes both CSRD audit and the ECGT Directive without difficulty.

Green Claims: the directive that does not exist

Many teams confuse ECGT with the Green Claims Directive, which aimed to impose ex-ante verification of any environmental claim. Discussed in 2023, it was withdrawn by the European Commission in June 2025 after the Council cancelled the final trilogue. It was never formally adopted, is not in force, and may never be. If you still see a deck mention 'the Green Claims Directive' as upcoming legislation, it is outdated. The active framework on environmental claims is ECGT, full stop.

CRCF: EU certification of removals

The CRCF Regulation (Carbon Removal Certification Framework), adopted in late 2024 and published in the Official Journal, structures the EU removals supply. Implementing Regulation (EU) 2025/2358 was adopted in November 2025 (certification schemes, certification bodies, audits). The Delegated Act for permanent removals (DACCS, BioCCS, biochar) was adopted on 3 February 2026. Carbon farming methodologies, covering regenerative agriculture and soils, were published for feedback until 19 February 2026, with adoption expected in summer 2026. Concretely, from 2027 onwards, 'CRCF-certified' credits will appear on the market with strong EU recognition for CSRD reporting. Watch this label.

Getting your company ready for 2026-2027

Three practical actions. (1) Check your Omnibus scope with your advisory firm: if you are above 1,000 employees AND €450M, get ready to publish on FY 2027. If you are below, your corporate clients will ask for your scope 3 data anyway. (2) Audit your product communications: drop 'carbon neutral', 'CO₂ neutral' and 'climate positive' claims now. ECGT applies in September 2026, but national regulators and NGOs anticipate. (3) Start structuring your ESRS E1-7 file: volume, standard, vintage, registry, retirement. Documentation matters as much as the purchase itself.

The information on this page is provided for informational purposes and does not constitute legal advice. Regulatory frameworks evolve: consult your advisors for tailored analysis.