Australia's corporate watchdog has forced tyre giant Goodyear to pay thousands of dollars in compensation to customers after claiming its newest tyres were environmentally friendly and cut carbon emissions.

The Australian Competition and Consumer Commission (ACCC) forced Goodyear Australia to compensate customers who bought its Eagle LS2000 tyre range, which was advertised as having "little environmental impact" and as being produced with fewer CO2 emissions.

ACCC chairman Graeme Samuel said the claims were unsubstantiated and in breach of the Trade Practices Act. He demanded that Goodyear partially reimburse consumers who purchased the tyres between February 2007 and March 2008.

Samuel also issued a stern warning to other companies participating in so-called "greenwashing", where firms exaggerate or lie about their environmental credentials.
"The ACCC will continue to look very closely at marketing that includes environmental claims, and will act decisively when such claims are false or misleading," he said.

Regulators in the UK and US have also ramped up their efforts to stamp out corporate greenwashing.

The US Federal Trade Commission (FTC) is in the process of tightening the country's environmental marketing guidelines, while the UK's Advertising Standards Authority (ASA) has warned firms that misleading "green" claims will not go unpunished.

The ASA last month revealed that complaints about corporate greenwashing had more than quadrupled in the past year.

Companies found to have misled customers about the environmental benefits of their products or services included oil giant Shell, which aired a television advertisement showing its refinery chimneys emitting flowers.

"It is vital that the ASA maintains standards in advertising and consumers are not misled," the ASA said in a statement earlier this month.