German court rules that Apple Watch is not “carbon neutral”
Another legal victory for Deutsche Umwelthilfe against corporate greenwash.
In September 2023, Apple launched its new Apple Watch with the claim that the watch is “carbon neutral”. The claim relied on carbon offsets, which Apple described as “high quality”. Apple advertises three of its smartwatch models as “carbon neutral”.
On 26 August 2025, the Frankfurt am Main Regional Court ruled that Apple cannot advertise its Watch as “carbon neutral”. The court ruled that Apple’s advertising was misleading and in breach of Germany’s Unfair Competition Act.1 The lawsuit was brought by Deutsche Umwelthilfe.
When Apple launched its “carbon neutral” watch REDD-Monitor pointed out that it was not carbon neutral:
Non-permanent eucalyptus plantations
Apple bought the carbon offsets from eucalyptus monocultures in Paraguay. A large area of the plantations are established on leased land. The leases on 75% of the project area expire in 2029. Apple was unable to prove that all the leases would be extended.
Deutsche Umwelthilfe argued that the eucalyptus monocultures would not neutralise Apple’s greenhouse gas emissions, but would only store them for a comparatively short period of time.
The court ruled that offsetting Apple’s CO₂ emissions could not be guaranteed after 2029. “There is no secure prospect for continuing the forest project,” the court states in a press release.
Buffer pool inadequate
The eucalyptus monocultures are certified by Verra, the Washington DC-based carbon certification company. Under Verra’s system, carbon projects set aside “buffer pools” of unsold carbon credits. These are supposed to function as a sort of insurance if the forest is destroyed by wildfire, insects, drought, storms, illegal logging, or illegal mining operations.
But recent research, published in Global Change Biology, found that Verra’s buffer pool is neither big enough not based on science.
Apple argued that the buffer pool solved the problem of extending the leases. The court rejected this argument. If the leases were not extended, Apple could only monitor the plantations.
In its press release, the court states that,
The possibility of just monitoring the removed part of the project area for the remainder of the project period, and allowing the buffer pool to be used in the case of a loss, does not provide a suitable measure for offsetting CO₂ equal to the continuation of the project beyond 2029.
“Systemic flaws”
Unfortunately the court’s press release did not point out that eucalyptus monocultures are not a suitable way of storing carbon. Especially when the carbon offsets generated from the plantations are traded against emissions from burning fossil fuels.
When Apple burns fossil fuels to produce, transport, and sell its watches, the emissions will remain in the atmosphere for hundreds of years. A paper published in Nature in November 2024 found that, “a CO₂ storage period of less than 1000 years is insufficient for neutralizing remaining fossil CO₂ emissions”.
The plantations in Paraguay are planned to be clearcut on a rotation of 15 years, or shorter. When the trees are cut there is no guarantee that the carbon will remain stored in the timber. The chance of the carbon still being stored in 1,000 years time is extremely slim.
Niklas Kaskeala is chair of the Compensate Foundation, a Finnish carbon credit consulting firm. In October 2023, Kaskeala told the Financial Times that offsets generated from fast-growing timber plantations present “systemic flaws”.
“Trees are turned into pulp and cardboard or toilet paper,” he said. “The carbon stored in these products is released back into the atmosphere very quickly.”
To make matters worse, fast-growing trees like eucalyptus use huge amounts of water and burn easily during droughts.
Arbaro Fund
Apple bought carbon offsets from two plantation projects in Paraguay to offset the emissions from its Apple Watches sold in Germany. The project description documents for both projects explain that the companies running the projects were set up by “an international forestry fund”.
That fund is the Arbaro Fund, a private equity fund incorporated in the tax haven of Luxembourg. The fund is managed by Arbaro Advisors that was established by an investment company called Finance in Motion and a forest consulting and management firm called the UNIQUE Group. The plantations in Paraguay are managed by the UNIQUE Group.
In a press release, Jürgen Resch, the CEO of Deutsche Umwelthilfe, commented that,
Apple incorrectly gives the impression that its Apple Watches, which are advertised as CO₂-neutral, have a balanced carbon footprint. This promise deceives consumers because it is based on carbon trading with an unsuitable compensation project. The alleged CO₂ storage in the commercial eucalyptus plantations is limited to just a few years, the contractual guarantees for the future are not sufficient and the ecological integrity of the monocultures is not guaranteed. With our climate lawsuits against greenwashing by industry and retail companies, we are ensuring that even billion-dollar corporations like Apple must provide consumers with honest and comprehensible information about the actual environmental consequences of their products.
Specifically, article 5, paragraph 1 of the Unfair Competition Act, which reads, “Anyone who carries out a misleading commercial act that is likely to cause the consumer or other market participant to make a commercial decision that they would otherwise not have made is acting unfairly.”