What is the upcoming EU Omnibus, and is this the starting point for a more agile European Union?
In the coming week, the European Commission has announced that it aims to publish its omnibus package, introducing measures to streamline reporting requirements across multiple EU sustainability laws to reduce the regulatory burden on businesses and to make EU business more competitive. What will this mean for the green transition, and will this mark a crossroads for the EU where simplification and deregulation become the norm?
While aimed at reducing administrative burdens and encouraging economic growth, the initiative has sparked debate about its potential impact on key regulations including the EU Taxonomy, Corporate Sustainability Reporting Directive (CSRD), and Corporate Sustainability Due Diligence Directive (CSDDD, also known as CS3D).
For reference purposes, the EU adopted the EU Taxonomy for Sustainable Activities already in 2020. The Taxonomy created a classification system for businesses and investors to know what activities are considered green or climate-friendly.
Following the taxonomy, the Corporate Sustainability Reporting Directive (CSRD) was published in 2023 and came into effect for selected companies in 2025 for fiscal year 2024.
Finally, the Corporate Sustainability Due Diligence Directive was adopted in May 2024. Creating additional reporting requirements, as well as legal liability, for companies concerning their supply chain. The intent is to not only regulate the direct actions of a company but also assure their suppliers comply with climate and human rights goals.
Although the omnibus package is set to be published on February 26th, Politico has obtained a draft of the legislation.
According to the draft proposal, the threshold for companies subject to reporting is increased significantly, limiting the requirements to those with over 1,000 employees and a net turnover exceeding 450 MEUR. This marks a major change from the current threshold of 250 employees and a turnover of 40 MEUR. The proposal also includes eliminating sector-specific reporting standards and delaying the due diligence law, which requires companies to address human rights and environmental issues in their supply chains.
The bill is also expected to include changes to the carbon border tax, though this was not confirmed in the leaked section of the bill. An earlier draft of the proposal originally included a scrapping of the double materiality rule in CSRD, but this is not mentioned in the most recent leak.
Already, the upcoming revised legislation has met resistance among several major corporations, urging the European Commission not to weaken existing sustainability reporting standards through its upcoming omnibus package. These companies, alongside NEI Investments, the Ethical Trading Initiative, and the Global Network Initiative, have expressed concerns about potential changes to established frameworks that could create uncertainty in corporate sustainability reporting.
How this will play out remains to see, and we will know more when we get the official proposal from the European Commission on Wednesday.
From my perspective, this shows a long-awaited course correction from the European Commission, moving away from an era where compliance has become an obstacle to competitiveness and growth. This was also the main theme of the European Commission 2025 Work Program, outlining its ambition to boost competitiveness, enhance security, and bolster economic resilience in the EU. It sets out how the Commission plans, over the next five years, to make implementation of EU rules easier in practice, to reduce administrative burdens, and to simplify EU rules. Hopefully,
The world is changed, much that once was, is lost. Europe must respond and adapt to a new reality, and hopefully, the upcoming Omnibus package is the first of many initiatives targeted to create economic growth and a unified and resilient Europe.
