EU halts talks on law tackling companies' fake 'green' claims

By Kate Abnett

BRUSSELS (Reuters) -The European Union halted negotiations on Monday on a planned law requiring companies to back up their climate-friendly claims with evidence, after the European Commission said the policy would overburden small companies and threatened to shelve it.

The dispute is the latest move by Brussels to weaken or simplify its green agenda, as the EU attempts to contain a political backlash against ambitious environmental policies, and to slim down regulation for struggling industries.

A spokesperson for Poland, which holds the EU's rotating presidency, said it had decided to cancel a round of negotiations on Monday between EU countries and lawmakers, who are attempting to finalise the EU's green claims law.

"We are hitting the pause button," the spokesperson said. "There are too many doubts and we need clarity from the European Commission on its intentions - based on that we can decide on the next steps."

It was not clear if negotiations would restart, they said.

The European Commission, which proposes new EU laws, said on Friday it intended to withdraw the proposed green claims law, because EU countries had indicated they wanted to expand the law to cover 30 million of the EU's smallest companies - which the Commission said would overburden these firms.

"The current discussions around the proposal go against the Commission's simplification agenda," a Commission spokesperson said on Friday, referring to its attempts to simplify EU regulation for European businesses.

The Commission had also come under pressure from centre-right EU lawmakers, who last week demanded the policy was scrapped.

The EU law aimed to stamp out misleading green labels for products from clothing to cosmetics and electronic goods. It would regulate labels like "natural", "climate neutral" or having "recycled content".

The Commission proposed the rules in 2023, after its own assessment of 150 claims about products' environmental characteristics found that around half provided "vague, misleading or unfounded information".

(Reporting by Kate Abnett; Editing by Alex Richardson)