KLM in Dutch court to answer 'greenwashing' allegation

AMSTERDAM, Dec 19 (Reuters) - Dutch airline KLM is set to face off with environmentalists in an Amsterdam court on Tuesday over whether its advertisements misled customers in an alleged case of "greenwashing".

The case brought by Fossil Free, which centres around KLM's "Fly Responsibly" advertising campaign, is seen as a test of what environmental claims the aviation industry can make while it remains a major contributor to greenhouse gas emissions.

KLM, the Dutch arm of Air France-KLM, denies greenwashing and says the Fly Responsibly campaign was intended to make people think twice before flying.

It says it should be allowed to continue advertising about its plans to become less polluting, including by mixing more biofuel into the kerosene that fuels its planes.

Fossil Free argues that there is no such thing as flying responsibly and KLM should apologise and be banned from making similar claims in the future.

Regulators and advertising authorities across Europe have increased scrutiny of companies' environmental claims, including an investigation into consumer goods giant Unilever announced last week by Britain's Competition and Markets Authority.

Airlines have been a particular focus as aviation is an industry that cannot easily cut carbon emissions. Advertising of its green efforts needs to reflect this reality, authorities have said.

In December, Britain's Advertising Standards Authority banned advertisements from Lufthansa, Air France-KLM and Etihad after it accused them of giving misleading impression. In June Europe's consumer rights body BEUC lodged a complaint with the European Commission against 17 airlines, saying they use terms such as "sustainable" deceptively.

KLM argues it has discontinued the Fly Responsibly campaign and now prefaces environmental claims by acknowledging that flying is currently not sustainable.

Fossil Free could seek damages in a later phase if the court finds in its favour.

A verdict is expected in early February. (Reporting by Toby Sterling and Joanna Plucinska Editing by Nick Zieminski)