The legislative landscape for EU corporate sustainability is seeing dramatic twists and turns, with a major setback in the Parliament's efforts to simplify the rules. Here's a concise breakdown of the week's breaking news on the Omnibus Simplification Package and other key regulations you need to know.
What is the Omnibus proposal?
The Omnibus Simplification Package is the European Commission's overarching legislative effort to streamline, simplify, and reduce the administrative burden of key EU sustainability laws.
It aims to fine-tune existing, complex directives—primarily the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the EU Taxonomy and CBAM—by adjusting requirements, reducing reporting scope for certain companies, and postponing application deadlines. The goal is to balance the EU's ambitious Green Deal objectives with business competitiveness, particularly for smaller firms.
Recent updates
1. Parliament Rejects JURI Compromise on CSRD/CSDDD Scope
The European Parliament has voted against supporting the JURI Committee's compromise proposal, which aimed to significantly narrow the scope of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
- Result: 318 MEPs voted against the compromise, defeating the 309 in favour.
- Implication: Instead of moving immediately to the trilogue negotiations, the Parliament will now hold a discussion on the Omnibus (including the JURI proposals to raise thresholds) in its next plenary session on 11-13 November.
- What this means: The push for a major simplification—raising the CSRD threshold to 1,000 employees + €450m revenue, and the CSDDD threshold to 5,000 employees + €1.5bn revenue—is temporarily halted. The debate on who should report and conduct due diligence is far from over. Uncertainty remains high for companies on the cusp of the original thresholds.
2. CBAM Simplifications are Law: New Threshold & Reporting Delay
The Omnibus amendments to the Carbon Border Adjustment Mechanism (CBAM) Regulation officially entered into force on October 20th.
- Key Change 1: A new de minimis exemption is implemented: importers with a total net mass of imported CBAM goods of 50 tonnes or less per year and material group are now exempt from all CBAM obligations.
- Key Change 2: The first CBAM certificate purchase/surrender for goods imported in 2026 is postponed to September 2027. This significantly eases the initial working capital pressure on companies adapting to the definitive regime.
3. EU Taxonomy Scrutiny Period Prolonged
The scrutiny period for the targeted amendments to the EU Taxonomy—including the materiality threshold of 10% and simplification of certain DNSH criteria—has been extended.
- New Deadline: The review period for the European Commission's Delegated Acts is now extended until January 5, 2026.
- Significance: While the goal is to reduce complexity, this extension prolongs the uncertainty around the final reporting rules for the 2025 financial year, which applies the new disclosures. Companies must continue to monitor the final text closely.
4. EU Deforestation Regulation (EUDR) Simplifications
The Commission has proposed targeted amendments to the EU Deforestation Regulation (EUDR), aiming for a smoother, yet still timely, implementation.
- No Delay for Most: EUDR shall still enter into force as planned on December 30th for medium and large companies.
- Grace Period: Large/Medium companies will receive a 6-month grace period, with checks only starting on June 30th, 2026.
- Simplification: Downstream operators and traders are now proposed to be exempt from due diligence requirements and filing Due Diligence Statements (DDSs). They would only need to obtain and keep records of DDS references from the initial operator.
- Small & Micro Operators: These operators get further simplifications and a full application delay until December 30, 2026.
The defeat of the JURI compromise signals a critical legislative battle ahead. Companies cannot assume simplification means total deregulation; rather, they must prepare for a possible return to a wider, more ambitious regulatory landscape.
