EU Omnibus Simplification Package: What You Need to Know
On February 26th, 2025, the EU Commission introduced the EU Omnibus Simplification Package, a set of proposed measures designed to simplify the various EU sustainability regulations (CBAM, CSRD, CSDDD), balance sustainability with economic competitiveness, reduce administrative costs by at least 25% (35% for SMEs) and cut red tape. EU officials are still discussing and determining the details of the Simplification Package and there are numerous implications that we will discuss in due course. In the meantime, click below for a high-level summary.
To get more detailed information, just email the TBG Purpose/EU team and visit the TBG Purpose page. Every single day, we work with global companies/multinationals and help them to comply with EU, U.S. and regional regulations, pursue their sustainability/ESG goals and achieve business objectives.
March 21st, 2025 Update: At its March 20th meeting, per Ropes & Gray, the “European Council adopted some key conclusions, called for the European Commission to work towards reducing the cost of administrative burdens by 25% (35% for SMEs), called on the Commission to identify ways to further simplify and consolidate existing legislation, and urged co-legislators to work forward on the Omnibus Simplification Packages as a matter of priority — with a view to finalizing them as soon as possible in 2025.“ (source: Ropes & Gray).
CSRD
The EU’s Corporate Social Responsibility Directive (CSRD) is focused on double materiality. It requires large, EU-based companies and all listed companies to disclose the risks and opportunities related to environmental and social issues and related impacts. More specifically, it applies to large EU-based and private organizations with more than EUR 150m in net turnover, EUR 25m in assets and 250 or more employees.
The Commission proposals would:
“Exclude an estimated 80% of the companies initially covered by the rules, by only applying them to firms with more than 1,000 employees. The CSRD is currently designed to cover around 50,000 companies with more than 250 employees.
Apply the same exemption to the EU's "taxonomy", which defines what can be considered climate-friendly investments, so that only companies with more than 1,000 employees will be required to report on their business's alignment with taxonomy criteria.
Give small and medium companies the right to refuse to provide certain data, if a bigger company asks them for this data to aid the bigger company's CSRD compliance. CSRD is already in force for the biggest companies, some of which have begun to publish their first reports in 2025.”
CBAM
The Carbon-Adjusted Border Mechanism (CBAM) is an EU law designed to account for carbon cost and combat “carbon leakage” by requiring importers to declare embedded emissions for all products imported into the EU. The CBAM transitional period lasts from 2023 through 2025 (quarterly reports) and the definitive regime will start in 2026.
“From 2026, firms importing steel, cement and other goods into the EU will have to pay an EU carbon border fee (CBAM) on the imported emissions in their products. The proposals would:
Change the rules to exclude around 182,000 of the 200,000 importers currently covered, on the grounds that they produce only 1% of emissions in the scheme.
Do this by only applying CBAM to companies importing goods weighing more than 50 metric tons per year. The existing rules cover all imports of CBAM-covered goods with a value above 150 euros.
Cut red tape around claiming a reduction in CBAM costs for goods imported from a country where manufacturers already pay a CO2 price. The Commission will from 2027 publish a calculation of annual average carbon prices in other countries, so companies don't have to make the calculation themselves.”
CSDDD
The Corporate Social Due Diligence Directive (CSDDD or “CS3D”) establishes human rights and environmental obligations for companies operating in the EU. It is designed to foster responsible behavior across operations and the value chain – and it calls for identification and mitigation of negative human rights and environmental impacts as well as a climate transition plan.
“The proposals would also scale back the CSDDD, which from 2027 would start imposing obligations on companies to find and fix human rights and environmental issues in their supply chains.The proposals would:
Delay the deadline for the first companies due to report from mid-2027 to mid-2028.
Require companies to apply the rules to their direct suppliers, but no longer to other subcontractors and suppliers further down their supply chains.
Companies would also have to assess their supply chains once every five years, rather than every year.
Oblige a company to suspend - replacing the current obligation to sever - a contract with a supplier that falls foul of the rules.
Not change the scope of the rules, which cover more than 6,000 large firms with more than 1,000 employees and 450 million euros in turnover.”
Sources: TBG, Reuters, EU