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French Tribunal Dismisses NGO Suit on Carbon Neutrality Claims

In a judgement dated April 19, 2022, the Tribunal of Paris (the "Tribunal") dismissed a misleading commercial practice claim brought by a consumer protection non-government organization ("NGO") against an energy supplier (the "Company") regarding carbon neutrality allegations. The Company was advertising for an electricity supply offer, claiming that such offer was "carbon neutral and 10% cheaper."

The NGO argued that the Company's allegedly "carbon neutral" offer did not relate to the supply of electricity from renewable sources, but claimed it was carbon neutral without providing adequate information to support such a claim. The NGO requested from the Tribunal that the Company be ordered to remove all present and future advertisements which included claims that the electricity was "carbon neutral," that it was "produced from sources emitting almost no CO2 or other greenhouse gas" and that such electricity was "respectful of our planet and the future generations." The NGO alleged that such claims would lead consumers to believe that, if they subscribed to the offer, they would adopt a behavior contributing to the preservation of the environment and concretely fight against the greenhouse effect. In addition, the NGO requested information regarding the mix of energy sources as well the guarantees of origin (i.e., a certificate to demonstrate to a final customer that a given share or quantity of energy was produced from renewable sources, as defined by Directive 2018/2001 on the promotion of the use of energy from renewable sources) obtained by the Company be included in the advertisement for the electricity sold by the Company.

The Tribunal first noted that additional information had, in fact, been made available by the Company. In particular, some of the disputed claims were posted on the Company's website and accompanied by an asterisk, referring to the Terms and Conditions tab where the term "carbon neutral electricity" was defined. In addition, other disputed claims were posted on the Company's website with links to explanations available on the Company's FAQ page. 

In the second step of its analysis, on the substance, the Tribunal found that the parties ultimately agreed on the definition of carbon neutrality in that it constitutes a mechanism for offsetting emissions and absorption. However, the Tribunal pointed out that the parties' underlying position and approach with respect to the issue were fundamentally different: the NGO considered that all greenhouse gas emissions should be reduced globally and that any other approach is either insufficient or biased, while the Company focused on its electricity supply activities with the idea that it is entitled to claim carbon neutrality based on the guarantees of origin it acquires. Finally, the Tribunal stated that that the notion of carbon neutrality is not yet the subject of a precise contextual definition, and each of the actors interpreted it according to their own point of view, depending on the interests for which they are responsible. As a consequence, the Tribunal dismissed the NGO's claim and ruled that the communications in question were not misleading.

Requirements surrounding the use of carbon neutrality claims have been clarified by the French legislator since this ruling. However, the takeaway from the April 19 ruling should be that, when no precise definition is available for a concept, the use thereof should not be considered misleading, as long as additional information and explanation are provided in support and easily accessible to the general public.

 

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