What Are the Penalties for Greenwashing in the EU?

The Directive That Contains No Penalty

Read Directive (EU) 2024/825 to the end and something is missing. The instrument that bans the unsubstantiated green claim, the generic "eco-friendly", the offset-based "climate neutral", has no penalties article. Its closing provisions cover review, transposition, entry into force, and who it is addressed to. Nothing about fines. The directive is an amending instrument: it rewrites Articles 6 and 7 and Annex I of the 2005 Unfair Commercial Practices Directive and leaves the enforcement machinery exactly where it found it.

This matters because the number everyone repeats comes from somewhere else. The widely cited penalty of four percent of turnover is Article 13(3) of the 2005 directive, replaced wholesale by a different instrument in 2019, and it says something narrower than the headline suggests: the maximum fine shall be "at least 4 % of the trader's annual turnover in the Member State or Member States concerned". At least, not at most. It sets a floor under what national ceilings must reach, not a cap on what regulators may impose. And the turnover is the turnover in the affected member states, not the group's global revenue.

What the Four Percent Actually Reaches

The narrower condition is the one that decides most cases. Article 13(3) applies where penalties are imposed "in accordance with Article 21 of Regulation (EU) 2017/2394", the Consumer Protection Cooperation Regulation. That article governs coordinated actions against widespread infringements: cases the CPC network runs across borders, together. An ordinary national greenwashing case, brought by one authority against one company in one market, never enters that route at all. The four percent is a cross-border instrument that most enforcement never touches.

Where turnover figures are unavailable, the same article sets a floor of two million euros. And national law frequently goes further than the European minimum: France's consumer code already provides for a greenwashing penalty of up to ten percent of turnover, or up to eighty percent of the cost of the advertising campaign itself, with a custodial term available. That provision predates the directive. The European headline number is not the sharpest tool in the room, and in France it is not even the sharpest tool in the country.

The Record Is Mostly Commitments

The enforcement history to date reads differently from the way it is reported. In the Netherlands, the consumer authority's 2022 action over sustainability claims by two large clothing retailers closed with binding commitments and voluntary donations, and the authority stated plainly that it would impose no sanctions. The sums involved, four hundred thousand and five hundred thousand euros, circulate widely as fines. They were not fines. The same pattern holds for the actions on a large online fashion platform in 2024 and on airline climate claims in 2025: commitments given, conduct changed, no penalty imposed.

Italy is the exception that shows what enforcement looks like when it bites. In August 2025 the competition authority fined a major Italian fashion house three and a half million euros over ethical and social responsibility statements contradicted by conditions found at its suppliers, covering conduct across nearly three years. Days earlier it fined the European operating company behind a fast-fashion platform one million euros over environmental claims, including those attached to a line marketed on its recycled content. Yet the same authority closed a case against another luxury house in May 2025 with no infringement finding at all, accepting commitments including a multi-year financial undertaking. Same authority, same year, same territory of conduct, opposite outcomes.

The Percentage Attaches to the Wrong Company

The structural finding sits inside the Italian fast-fashion decision, and it is not what the coverage drew from it. The entity fined was the European service company that operates the platform's sales sites, and the authority's own decision records its annual revenues at just over three million euros. Four percent of that is roughly one hundred and twenty thousand euros. The authority did not use the four percent route. It reached instead for Italy's ordinary national ceiling and imposed one million: about eight times what the celebrated European penalty would have produced.

This is the enforcement gap that the September date does not close. A turnover penalty attaches to the trader, and in cross-border retail the trader of record is frequently a thin European service entity whose revenue bears no relation to the group whose name is on the garment. The percentage is calculated against the smaller number by construction. A penalty designed to scale with corporate size scales instead with corporate structure, and corporate structure is the thing a large group can arrange most easily.

The Deadline Arrives Before the Law Does

The 27 September 2026 date is the day national transposing measures must apply. It presumes those measures exist. On 28 May 2026 the European Commission sent letters of formal notice to twenty of the twenty-seven member states for failing to communicate complete transposition, France and the Netherlands among them. France's transposing bill remains in committee in the National Assembly. A prohibition applies through national law; where national law has not landed, the prohibition arrives with nothing to carry it.

The enforcers have also signalled restraint on the first wave. In June 2026 the CPC authorities agreed a common understanding on stock already produced, indicating that they may take a phased approach, may favour compliance-oriented engagement before considering sanctions, and may avoid requiring the destruction or recall of goods already made. That is a sensible position, and it is also a clear statement that late September is a beginning rather than a cliff.

Coda: What Actually Changes

None of this makes the ban weak. It makes the mechanism different from the one the industry has been briefed on. The claims themselves become unlawful on schedule, and the reputational and civil exposure attached to a regulator's published finding does not depend on the size of the fine. The Italian decisions are instructive precisely because the money was small against the revenues involved and the documents were not: the authority's reasoning, the supplier conditions, the specific claims and why they failed, all published and permanent.

The discipline this institution keeps recommending is unchanged and now has a second reason behind it. Substantiate the claim, or do not make it. Not because four percent is coming, since for most houses it is not, but because the era in which an environmental adjective cost nothing to attach and nothing to defend is ending on a published date. What replaces it is not primarily a fine. It is a record.