Revision of the Low Carbon Label Decree and Order

In 2025, the decree and order governing the Low Carbon Label (LBC) were revised. This update brings greater clarity and harmonization with European and international standards, while strengthening the transparency and readability of the framework.

Clarified Terminology: the “Carbon Credit”

The first major change concerns the vocabulary. Until now, one ton of CO₂ equivalent reduced or sequestered was called “emission reduction.” It is now designated by the term “carbon credit.”
This change allows both:

• to better reflect the reality of projects (direct emission reductions or additional sequestration);
• to harmonize the French system with European and international standards;

• to prepare for the opening to the transferability of credits, planned under the new framework.
  A certified project initially generates potential carbon credits, corresponding to an estimate validated by the certification.
  Then, after the audit (verification), the project will have generated verified carbon credits. In the case of forestry projects, these are more precisely ex-ante credits, which certify a probable sequestration trajectory before the project’s full completion (calculation of CO₂ absorption over the next 30 years).

   

Transferability of Carbon Credits: A Structural Evolution

Until now, the system limited the number of possible transfers, which could in some cases complicate credit management. Now, verified carbon credits become transferable without limitation, within a secure framework clearly overseen by the national registry.
This change aims to:

• ensure coherence with the CSRD directive and international standards;
• offer greater flexibility to project developers and financiers;
• facilitate the financing of long and complex projects, thanks to better-organized credit circulation.
  A carbon credit can therefore be freely transferred until its retirement, when it is definitively used and becomes non-transferable.

The Central Role of Retirement

Retirement marks the definitive use of a carbon credit by its final beneficiary, whether as part of a contribution or voluntary or mandatory offsetting. This step fixes the credit’s year of use in the registry and grants it its final status.
Retirement constitutes an essential lock to guarantee:

• the integrity of the Low Carbon Label,
• the absence of double counting or non-compliant declaration,
• transparency towards stakeholders.
  Regarding communication, three levels are possible:
• before verification: it is allowed to mention potential carbon credits, provided their provisional nature and the existence of a future audit that will confirm their value are explicitly stated;
• after verification but before retirement: the verified nature of the credits can be indicated, specifying that their definitive use will only occur at the time of retirement;
• after retirement: only this step authorizes official communication on the corresponding climate impact.

Transparency: Website and Label Registry

To guarantee clear and shared information, two complementary tools are planned:

• a public website, giving access to the list of certified projects as well as detailed information (methodology, location, credits awarded, co-benefits, audit reports, etc.);
• a national registry, reserved for holders, financiers and auditors, ensuring the traceability of carbon credits and the official recording of transfers.

Legal Certainty and Limited Retroactivity

Legal certainty is central to maintaining stakeholder confidence. The revision ensures that new rules will not penalize projects already underway. Retroactive adjustments are limited to transparency aspects, without recalculating volumes of credits already granted.
However, the possibility of transferability will also apply to projects already certified or in progress, in order to streamline financing pathways.

Legal, Fiscal and Accounting Qualification

From a legal and fiscal perspective, the purchase of carbon credits from the Low Carbon Label remains, to date, considered a service provision.
Discussions are ongoing at the international and European level (Unidroit, Accounting Standards Authority, Paris Financial Center) to define a harmonized framework. However, no binding change has yet been adopted.

Communication and Climate Claims: A Strict Framework

Communication about carbon credits must be transparent and compliant to avoid any confusion or risk of greenwashing.

• It must mention the direct link between credits and funded projects.
• It must not in any way imply that purchasing credits equates to the carbon neutrality of an organization, nor to the labeling of a product or service.
• As long as credits have not been verified, all communication must recall their provisional nature (“estimated at”, “potential”, “conditional”, etc.).
• As long as they have not been retired, any mention must specify that the definitive use of the credits will only be established at the time of retirement.
  The Low Carbon Label certifies projects, not the organizations acquiring credits.