Take on a podcast episode from The CDR Policy Scoop, originally published Wed, 17 Ju. Listen: https://shows.acast.com/the-cdr-policy-scoop/episodes/with-dr-ruth-dagan

TL;DR

  • Climate-washing lawsuits up 70% since 2022; Grantham counts ~160 cases, 54 directly tied to offset-based claims. Useful baseline number.
  • EU Empowering Consumers Directive (in force September) flatly bans product-level carbon-neutral claims; California’s AB 1911 goes opposite direction with a safe harbor for high-integrity credits.
  • Apple Watch carbon-neutral case: lost in Germany (permanence only guaranteed to 2029 vs. an implied 2040 horizon), tentatively won in US, now on appeal.
  • Registries — including Article 6.4’s PACM — explicitly disclaim that account-holders legally own the credits. Dagan calls this an unforced error throttling collateralization.
  • UNIDROIT principles (due early 2027) would classify credits as intangible assets. The fix everyone in finance has been waiting for.

Sebastian Manhart hosts Dr. Ruth Dagan (Herzog, formerly UNFCCC legal affairs) for a 30-minute tour of two legal bottlenecks chilling corporate buying: greenwashing litigation exposure, and the bizarre fact that carbon registries refuse to assert that account holders actually own anything. Eve Tamme is out sick. Episode link.

The Apple Watch breakdown is the load-bearing piece for buyers. In Germany, the court read “carbon neutral” as implying a 2040 permanence horizon (apparently the default reasonable-consumer interpretation in German jurisprudence), and Apple’s underlying project only guaranteed permanence to 2029 — gap fatal. In the US, an NGO challenged project quality directly and lost on evidentiary grounds; appeal pending. Dagan’s point isn’t that Apple was sloppy — she stresses they did the homework — it’s that even diligent buyers of high-integrity credits land in court, which is precisely what produces green-hushing and drains voluntary demand. Hence the push, via the Coalition to Grow Carbon Markets and IETA, for safe-harbor constructs. California’s AB 1911 is the live example: comply with defined integrity criteria, get affirmative legal protection. The EU is going the other way — the Empowering Consumers Directive (transposition deadline September) blacklists product-level neutrality claims outright. Corporate-level net-zero claims survive if substantiated; product claims do not. For durable CDR buyers selling tonnes into consumer-goods companies, this matters: the “carbon-neutral iPhone” use case is functionally dead in Europe.

The ownership question is the one CDR practitioners should sit up for. Registries — Verra, Gold Standard, and yes, the Article 6.4 PACM — carry disclaimers stating the account merely reflects what’s in it, not who legally owns it. As Dagan puts it: “It’s the work of some super paranoid lawyer that really hinders the market.” No clean ownership = no collateral = no financial institutions = no project finance at scale. UNIDROIT’s principles project, concluding early 2027 and backed by IOSCO, would classify credits as intangible assets — the foundation for registered ownership and secured lending. Her ask of PACM: adopt a prima facie ownership presumption tied to account holder, push disputes into domestic courts. Whether the UNFCCC legal team has the appetite is open.

For durable CDR context, this connects to the buyer-side risk conversation Frontier and others have been navigating quietly — their offtake structures are bespoke partly because the underlying legal asset is so weak. It also intersects with the ICVCM/CCP integrity work, which produces the substantive standard a safe harbor would point to. Without UNIDROIT-style asset clarity, none of the structured-finance pathways CDR developers keep pitching (forward credit securitization, project-level debt) actually work.

Worth the hour for buyer-side couns