On 26 February 2025, the European Commission proposed an 'Omnibus package' that could significantly alter how American businesses approach compliance with key EU regulations.
This proposal aims to streamline several recently adopted sustainability laws, including the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy Regulation, the Corporate Sustainability Due Diligence Directive (CSDDD), and the Carbon Border Adjustment Mechanism (CBAM).
Why does this matters to you
If you're responsible for product compliance in a manufacturing or trading company with operations in Europe, these proposed changes could substantially impact your compliance obligations. The package introduces several modifications that might reduce the regulatory burden for many companies, particularly those of moderate size.
Key proposed changes to the CSRD
The CSRD changes could be particularly impactful:
- Higher thresholds: The proposal raises reporting thresholds to align with the CSDDD. For non-EU parent companies, the EU turnover threshold would increase from €150 million to €450 million, taking many companies out of scope.
- Value chain reporting restrictions: Companies would no longer need to seek information from value chain partners that aren't themselves subject to CSRD, beyond specific data points in new 'voluntary' standards.
- Limited assurance remains: The package doesn't delay the limited assurance requirement but removes the future obligation to move to reasonable assurance.
- No sector-specific standards: Previously planned sector-specific reporting standards would be eliminated.
- Fast-track delay proposal: A separate proposal would delay CSRD reporting requirements by two years for companies due to begin reporting from 2025 onwards.
CSDDD modifications that ease compliance
The package also proposes several changes to the CSDDD:
- One-year implementation delay: The first application would be pushed to 26 July 2028, giving companies more time to prepare.
- Focus on direct suppliers: In-depth assessments would only focus on your operations, subsidiaries, and direct suppliers (rather than the entire value chain).
- Less frequent monitoring: Monitoring assessments would be reduced from annual to once every five years.
- Civil liability changes: The EU-wide civil liability regime would be removed, leaving decisions on liability to individual member states.
- Greater enforcement discretion: Member states would have more flexibility in establishing penalties for non-compliance.
CBAM exemptions for smaller importers
The proposal introduces a new CBAM cumulative annual threshold of 50 metric tons per importer, which could exempt approximately 90% of companies. However, the Commission has confirmed plans to extend CBAM to other sectors and downstream goods as early as 2026.
What should you do now?
These proposed changes create significant legal uncertainty, particularly for companies already preparing for CSRD compliance. Until the "stop-the-clock" delay is officially adopted, companies face a difficult decision: continue preparing under current regulations or anticipate the changes taking effect.
Remember that this package is still a legislative proposal and must pass through the European Parliament and Council for negotiation. Both bodies can amend the provisions so that the final version may differ from the current proposal.
For product compliance managers, we recommend:
- Assess whether your company would remain in scope under the new thresholds.
- Continue reasonable preparation while monitoring developments.
- Focus on understanding your direct suppliers as a priority.
- Review your existing climate transition plans for alignment.
- Consider which EU member states might offer more favourable enforcement regimes.
The Omnibus package represents a significant shift in the EU's approach to sustainability regulation. While potentially reducing the compliance burden for many companies, it focuses on improving environmental and social performance. Stay informed as these proposals move through the legislative process to ensure your compliance strategy remains effective.
