Apple's claim that its Apple Watch is "carbon neutral" has been struck down by a German court, which ruled that the tech giant relied on short-term offsetting projects that failed to meet long-term climate standards. The decision comes after a legal challenge from Deutsche Umwelthilfe (DUH), a leading environmental and consumer watchdog in Germany.

The case adds to growing global scrutiny of carbon neutrality claims based on voluntary offsetting, especially as the European Union prepares to implement new rules aimed at curbing greenwashing.

The Court's Ruling: Offsets Too Short to Count

At the heart of the ruling is Apple’s use of reforestation credits to offset the remaining 25 percent of emissions associated with its smartwatch production. Apple had previously stated that emissions were reduced by 75 percent, with the rest being offset through carbon credits from forest projects in Paraguay and Brazil.

However, according to the court, 75 percent of these forest lease agreements are set to expire by 2029. Apple failed to demonstrate that the projects would continue long enough to justify a claim of lifetime carbon neutrality. The court argued that consumers likely interpret "carbon neutral" to mean compensation for emissions through at least 2050, in line with global climate targets under the Paris Agreement.

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DUH emphasized that carbon emissions remain in the atmosphere for up to 1,000 years, and that short-term forest leases cannot offer meaningful long-term climate mitigation.

A Broader Backlash Against Carbon Offsets

Apple is also facing a class-action lawsuit in California for making similar claims about its Apple Watch based on questionable carbon offsets. The suit alleges that some of the credited offsets came from forests that were either already protected or not under threat to begin with.

This latest legal development highlights broader concerns about the integrity of the voluntary carbon market. According to DUH, the lack of oversight in this sector creates a high risk of misinformation and fraud.

Multiple investigations back this claim. A 2023 joint exposé by The Guardian, Die Zeit, and SourceMaterial found that 90 percent of carbon offsets certified by Verra, the world’s largest issuer, were "worthless." A 2024 study published in Nature Communications reported that 87 percent of corporate offsets carried a high risk of failing to deliver real emissions reductions.

In Brazil, Reuters found that two-thirds of Amazonian offsetting projects were linked to illegal deforestation.

Apple's Silence and EU's Growing Greenwashing Crackdown

While Apple has not confirmed whether it will appeal the ruling, the company has already begun phasing out the term "carbon neutral" in its marketing, aligning with the European Union’s new Empowering Consumers for the Green Transition directive.

Set to take effect in September 2026, the directive will prohibit companies from labeling products as "carbon neutral" if the claim is based on offsetting rather than actual emission reductions.

Under the EU’s harmonized rules, other countries in the bloc will be able to issue warnings or take legal action against similar marketing claims. DUH noted that it is also monitoring other major companies for misleading carbon claims, including Shell, BP, and TotalEnergies.

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A Wake-Up Call for Corporate Climate Messaging

The ruling serves as a cautionary tale for companies using offsets as the basis for carbon neutrality claims. With increasing legal and regulatory scrutiny, corporate sustainability communications must now meet higher standards for transparency and durability.

As more companies seek to align with net zero goals, the focus is shifting from offsetting to actual emissions reductions. The Apple Watch case underscores that credibility in climate action depends not just on what companies promise, but how those promises are measured and verified.

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