Decree on Carbon Neutrality for Products: Order Your Carbon-Neutral Barrel of Oil!

The decree implementing the law regulating “carbon neutrality” claims for products was open for public comment until February 10. Carbone 4 sets out its position here on this text, which falls far short of what is needed.

In the summer of 2021, in a dramatic turn of events, the bill regulating claims of “carbon neutrality” for products and services had, in the final days of its consideration by the joint committee on the Climate Act, turned into a veritable machine for unabashed greenwashing.

Let us recall that the original intent of the law was to prohibit misleading claims of “carbon neutrality” for products and services, in accordance with ADEME's opinion on the issue. The bill that was ultimately passed in July 2021 still proposed banning these claims, but added a seemingly innocuous exception: if the company could provide evidence regarding the measurement, reduction, and offsetting of the emissions from the product in question, then it would gain the indisputable right to claim “neutrality.” This simple addition was enough to completely reverse the law’s original intent, as the criteria in question were, in reality, very easy to meet. From the text prohibition Given these claims of neutrality, the law then risked becoming a text that indirectly enshrined them authorization, since it was so easy to meet the criteria to avoid the ban.

The only hope was that the decree implementing the law would set sufficiently ambitious standards for the criteria in question, in order to establish the right safeguards. Let's review the content of the decree regarding each of these points and see how it in no way restores the original intent of the law.

Measuring the product's emissions

The decree recommends measuring the product’s emissions in accordance with ISO 14067. This technical jargon simply means that emissions will be accurately measured, and that no significant aspect of the product’s life cycle will be overlooked. Nothing to note here.

Reducing the product's emissions

The decree then states that the company must submit “an annex setting out the target trajectory for reducing GHG emissions associated with the product or service (...) with quantified annual progress targets, covering at least the ten years following the publication of the report under this section”.

It is shocking to see that the wording does not require any level of ambition for this “reduction trajectory.” As it stands, a product that plans to reduce its emissions by 0.5% per year fully complies with the decree’s criteria, even though the reduction rate needed to meet the Paris Agreement is more in the range of 5% to 7% per year. Certification of the trajectory by an external third party as being 1.5°C-compatible therefore seems to be an essential prerequisite. To raise the level of ambition, one could also require that the company itself commit to a reduction trajectory.

We therefore propose the following additions:

• Add: "The established reduction trajectory must be recognized by an external third party as consistent with the temperature goal set forth in the Paris Agreement."
• Add: "To communicate that its products are carbon-neutral, the advertiser must itself have a Group-wide emissions reduction trajectory that is consistent with the temperature goal of the Paris Agreement and certified by an external third party."

Moreover, one might be surprised by the concept of emissions reduction of a product or service. A company—which is an entity that endures over time and is capable of transformation and evolution—can indeed reduce or increase its footprint over time. But for a product, it’s not the same: once an object is manufactured, it is incapable of any further change. Once it is sold, it is… sold. Since its emissions during the use phase are beyond the company’s control, it is impossible to plan for their reduction over time. What, then, is the meaning of “reducing a product’s emissions”? This is an intrinsic contradiction in the concept of “carbon neutrality” at the product level.

Further on, we find the following sentence: ““There are also plans to prohibit the continued use of the neutrality claim if it is found that emissions associated with the product or service, before offsetting, have increased between two consecutive years.”

Given the above, the ban on continued marketing should instead take effect when the product’s emissions have not decreased sufficiently from one year to the next. It is worth noting that achieving more than just a stabilization of global emissions will be necessary to comply with the Paris Agreement. Once again, the leniency of this requirement is shocking.

We therefore propose:

• Edit : "The advertiser must remove the statement referred to in Article D. 229-105 if it appears that the per-unit costs associated with the product or service, before offsetting, "have not met the reduction target set out in Annex 2 between two consecutive years."

Offsetting the product's emissions

The third and final section of the decree, compensation, is subject to several requirements. The company must provide “An appendix detailing the terms and conditions for offsetting residual emissions, specifying, in particular, the nature and description of the offset projects. This appendix may also voluntarily provide information on their cost (total, and per metric ton of CO2 equivalent). This appendix demonstrates that the volume of emissions avoided or reduced through this offsetting corresponds to the residual emissions from all products or services sold and covered by the advertisement. This appendix also specifies the procedures implemented by the advertiser to ensure that it does not double-count the offsets provided by these projects. In particular, it outlines the procedures for removing emission reductions from the market when offset credits are used. Finally, this appendix details the efforts made to ensure the greatest possible consistency between the geographic areas where the projects are carried out and where the emissions occur.

Let's start by proposing a few changes to the text to make it more ambitious:

• Edit: "This appendix must "also provide information on their cost (total, and per metric ton of CO2 equivalent)"
• Add: "This appendix must also specify whether the credit is a carbon avoidance, reduction, or sequestration credit."
• Add: "This appendix must also specify the host country of the carbon projects supported by the advertiser, as well as the credit certification standard, if applicable."

Furthermore, it is important to note that the apparent rigor of such a list of criteria at the project level should never obscure the fact that the very idea of “offsetting” emissions for the purpose of cancellation is absurd. In other words, just because a company provides proof of the integrity of the carbon credits it purchases does not mean that those credits can be used for any purpose by the buyer. Unfortunately, that is exactly what is happening here: provided that credits are purchased at a high enough price, any product—no matter how incompatible it may be with the energy transition—can, in theory, become “carbon-neutral.”

Overall, the draft decree under public consultation fails to restore the law’s original ambition. To fully appreciate its shortcomings, let’s consider that its criteria allow for such incongruities as “neutral” gas, “neutral” oil sands operations, or even “neutral” barrels of oil. Indeed, for this last example, all it would take is:

• to calculate the emissions from a barrel of oil, from production to use;
• to commit to an emissions reduction plan with an arbitrarily low target (and without even having to comply with it);
• to simply keep barrel emissions at a constant level over time;
• to make up for it all.

Thus, this legislation—which was originally intended to regulate claims of carbon neutrality—manages the remarkable feat of paving the way for a +4°C world filled with “neutral” products and services. History may shed light on the reasons behind the drafting of such a counterproductive law: at best, incompetence; at worst, a blindness to the Don't Look Up to ensure that a certain level is maintained business as usual ; a stubborn clinging to concepts that have been outdated since the Paris Agreement was adopted; a certain subservience to short-term market forces and to satisfying a so-called “demand” from downstream consumers for this type of product. In short, a desire to delay as long as possible the moment when real choices must be made in the fight against climate change.