A picture taken on Jan 1, 2022 shows the European Union flag under the Arc de Triomphe, on the Place de l'Etoile in Paris. (ALAIN JOCARD / AFP)

BRUSSELS - The European Commission wants to require companies in Europe to back up climate-friendly claims about their products with evidence, under draft rules to stamp out misleading green labels for products from clothing to cosmetics.

The European Union is set to propose on Wednesday new requirements on companies seeking to promote goods sold in Europe with labels like "natural", "climate neutral" or having "recycled content".

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Greenwashing is rampant in Europe, by the EU's own analysis

A draft of the proposal, seen by Reuters on Tuesday, said to use such labels, a company must first carry out a science-based assessment, assessing all significant environmental impacts, to prove that its product lives up to the claim, or have it verified under an environmental labelling scheme.

An accredited verifier - independent of the company - would then need to check the claim, before a company can publicly use it. Companies that make climate-friendly claims without proof could face financial penalties.

Greenwashing is rampant in Europe, by the EU's own analysis. A Commission assessment of 150 claims about products' environmental characteristics in 2020 found that most - 53 percent - provided "vague, misleading or unfounded information".

The draft said the rules aim to help consumers identify which products are truly eco-friendly and give proper credit to companies whose products have real environmental benefits.

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The proposal would cover all consumer products sold in the EU, unless they are covered by existing EU laws that regulate certain labels - for example, organic-labelled food.

Campaign groups welcomed the draft plan as a step forward from the largely unregulated proliferation of green claims today. But they warned the proposal would give companies too much leeway to choose which data or impacts they use to assess a claim - instead of setting a firm Europe-wide standard for all.

"You could have one product assessed by two different methodologies, and that would give you completely different results," said Margaux Le Gallou, programme manager at the non-profit Environmental Coalition on Standards.

Among the requirements would be that companies whose claims rely on buying carbon credits to offset their own environmental impact must disclose this.

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EU countries and the European Parliament must negotiate and approve the final law before it can apply - a process that typically takes more than a year.