EU Omnibus Tracker: simplification of sustainability rules

First Omnibus package (Omnibus I)

The Commission published the first Omnibus package (Omnibus I) on 26 February 2025.

These proposals now need to be negotiated and adopted by the European Parliament and Council (discussed in more detail below). 

The first Omnibus package proposes changes to the: 

• Corporate Sustainability Reporting Directive (CSRD); 
• Corporate Sustainability Due Diligence Directive (CSDDD / CS3D); 
• Taxonomy; and 
• Carbon Border Adjustment Mechanism (CBAM). 

Linklaters - EU: Commission publishes first Omnibus package with changes to CSRD and CSDDD

Linklaters - EU: European Commission sets out proposals to simplify Taxonomy Delegated Acts

Linklaters - EU: Commission proposes changes to Carbon Boarder Adjustment Mechanism (CBAM) as part of first Omnibus package

Linklaters - Webinar recording: European Commission publishes first Omnibus package – what we know so far - with a focus on CSRD and CSDDD

Linklaters - Webinar recording: What the EU's first Omnibus package means for financial services firms

The “Stop-the-Clock” Directive forms part of the first Omnibus package.

The “Stop-the-Clock” Directive was published in the Official Journal of the EU on 16 April 2025.

Member States must transpose the Directive into national law by 31 December 2025.

The “Stop-the-Clock" Directive delays: 

• the entry into application of the CSRD requirements for large companies that have not yet started reporting, as well as listed SMEs, by two years; and 
• the transposition deadline and the first phase of the application (covering the largest companies) of the CSDDD by one year.

Delay to CSRD:

• "Second wave" companies which were due to report in 2026 (in respect of the 2025 financial year) will now need to report in 2028 (in respect of the 2027 financial year). 
• "Third wave" companies which were due to report in 2027 (in respect of the 2026 financial year) will now need to report in 2029 (in respect of the 2028 financial year). 
• "First wave" companies which need to report in 2025 (in respect of the 2024 financial year) will be addressed via the "Quick Fix" proposal (see below). 

Delay to CSDDD:

• The deadline for transposition into national law is now 26 July 2027 (instead of 2026). 
• The first wave of companies will have to comply from 26 July 2028 (instead of 2027). 

Linklaters - EU: Omnibus "Stop-the-Clock" Directive published in Official Journal of the EU

Linklaters - EU Stop-the-Clock Directive transposition tracker

Requirements proposal 

The Commission published the Requirements proposal on 26 February 2025, as part of the first Omnibus package.

The Council is expected to agree its negotiating position in June 2025.

The European Parliament is expected to agree its negotiating position in October 2025. 

Negotiations (“trilogues”) between the Council and European Parliament are expected to start in November 2025. 

However, please note that this is just a tentative timeline which may change. 

The Requirements proposal makes substantive changes to the CSRD and CSDDD, including changes to reduce the number of CSRD in-scope companies by about 80%.

Linklaters - EU: Commission publishes first Omnibus package with changes to CSRD and CSDDD

Linklaters - Webinar recording: European Commission publishes first Omnibus package – what we know so far - with a focus on CSRD and CSDDD

The Commission published on 26 February 2025, as part of the first Omnibus package, a call for evidence on proposed amendments to the:

• Taxonomy Disclosures Delegated Act;
• Taxonomy Climate Delegated Act; and
• Taxonomy Environmental Delegated Act. 

The call for evidence closed on 26 March 2025.

The Commission had said it planned to adopt these Delegated Acts in Q2 2025. 

Once the Commission has adopted the Delegated Acts, the European Parliament and Council will have four months (which can be extended by a further two months) to formally object to the Delegated Acts (the “objection period”). 

If no objections are raised during the objection period (known as “non-objection”), the Delegated Acts are published in the Official Journal of the EU (OJEU) and enter into force. 

The Delegated Acts can also enter into force before the expiry of that period, if the Parliament and the Council have both informed the Commission that they will not object (known as “early non-objection”). 

Neither the European Parliament nor the Council have the power to amend the text of the Delegated Acts – the most they can do is to veto them (in doing so, they can ask the Commission to amend the text in whole or part). 

The changes in the Delegated Acts are intended to apply from 1 January 2026.

The purpose of the amendments to these existing Taxonomy Delegated Acts is to simplify reporting requirements, most notably by introducing a financial materiality threshold and reducing reported data points by around 70%.

Linklaters - EU: European Commission sets out proposals to simplify Taxonomy Delegated Acts

CBAM proposal 

The Commission published on 26 February 2025 a proposal for a Regulation amending the existing CBAM Regulation, as part of the first Omnibus package.

The proposal will now need to be negotiated and adopted by the European Parliament and Council under the “ordinary legislative procedure”.

The European Parliament agreed its negotiating position on 22 May 2025 (see press release). 

The Council agreed its negotiating position on 27 May (see press release).  

The negotiations ("trilogues") between the Council and European Parliament can now start. 

The Commission has proposed a number of changes to the existing CBAM Regulation, including a new de minimis mass threshold of 50 tonnes which would exempt 90% of importers from the CBAM while still covering 99% of CO2 emissions from in-scope CBAM emissions. 

In addition, the Commission had said it will present a report on a wider review of the CBAM in the second half of 2025. 

The review will: 

• consider extending the scope of the CBAM to additional EU ETS sectors and downstream products;
• consider the inclusion of indirect emissions across all CBAM sectors, taking into account the indirect costs of electricity for EU producers; 
• outline a strategy to manage potential circumvention risks; 
• review measures to address the problem of carbon leakage of goods exported to third countries.

This review will be followed by a legislative proposal in the first half of 2026.

Linklaters - EU: Commission proposes changes to Carbon Boarder Adjustment Mechanism (CBAM) as part of first Omnibus package

European Parliament press release

Council press release

4-column table, which will serve as the basis for negotiations between the Council and European Parliament  

The Commission has asked EFRAG to submit their advice on simplification of the existing ESRS by 31 October 2025. 

EFRAG agreed its work plan on 25 April 2025. 

EFRAG published an initial call for feedback on 8 April 2025 on simplification of the ESRS. The call for feedback closed on 6 May 2026. 

EFRAG is aiming to publish Exposure Drafts of the revised ESRS by the end of July 2025 and carry out a 30-45 day public consultation on the Exposure Drafts thereafter so that it can deliver the revised ESRS to the Commission by the 31 October 2025 deadline.

The Commission intends to revise the existing (non-sector specific) ESRS under the CSRD to reduce substantially the number of data points, clarify provisions deemed unclear, and improve consistency with other pieces of legislation. This is part of the first Omnibus package. 

The Commission has also proposed (in the Requirements proposal) to remove the power for the Commission to adopt sector-specific ESRS.   

Linklaters - EU CSRD: Commission mandates EFRAG to simplify ESRS

Linklaters - EU: EFRAG launches public call for feedback on ESRS revision

Linklaters - EU CSRD: EFRAG agrees work plan to revise ESRS

The Commission indicated in a public meeting on 13 May 2025 of the European Parliament's Committee on Legal Affairs (also known as the JURI committee) that it intends to publish a Delegated Act to amend the existing Delegated Act containing the European Sustainability Reporting Standards (ESRS) in order to freeze certain reporting requirements for the “first wave” companies in the CSRD in 2026 and 2027. This is being referred to as the “Quick Fix” proposal. 

The Quick Fix proposal would revise the existing ESRS to ensure that companies that had to begin reporting under the CSRD for financial year 2024 do not have to report additional information provided in Appendix C to the existing ESRS when reporting for financial years 2025 and 2026.

The “Stop-the-Clock” Directive (which delays by two years the CSRD requirements for second and third wave companies) does not cover first wave companies.

The Commission published on 15 April 2025 updated guidance, FAQs and a draft Delegated Act amending the EUDR. 

The consultation on the draft Delegated Act closed on 13 May 2025. 

Once the Commission has adopted the Delegated Act, the European Parliament and Council will have two months (which can be extended by a further two months) to formally object to the Delegated Act (the “objection period”). 

If no objections are raised during the objection period (known as “non-objection”), the Delegated Act is published in the Official Journal of the EU (OJEU) and enters into force. 

The Delegated Act can also enter into force before the expiry of that period, if the Parliament and the Council have both informed the Commission that they will not object (known as “early non-objection”). 

Neither the European Parliament nor the Council have the power to amend the text of the Delegated Act – the most they can do is to veto it (in doing so, they can ask the Commission to amend the text in whole or part). 

The updated guidance and FAQs provide companies, EU Member States' authorities and third countries with additional simplified measures and clarifications on how to demonstrate that their products are deforestation-free. 

These measures are expected in the aggregate to result in an estimated 30% reduction in administrative costs and burden for companies. 

The Commission has also published a draft Delegated Act focusing on clarifications and scope adjustments requested by stakeholders. The draft Delegated Act includes targeted fixes to the list of in-scope products in Annex I to the EUDR. 

Linklaters - EU: Commission publishes new guidance and draft Delegated Act to simplify due diligence requirements under Deforestation Regulation

Revision of Sustainable Finance Disclosure Regulation (SFDR)

The Commission published a call for evidence on 2 May 2025.  

The call for evidence closes on 30 May 2025.

The aim is to incorporate the feedback into the Commission's SFDR revision work plan, which is currently targeted for Q4 2025.

The Commission's call for evidence will feed into an impact assessment on a revision of the SFDR. 

It is seeking views on how to simplify key concepts, streamline and reduce disclosure requirements focusing on the most essential information for investors, and explore the case for categorising financial products that make sustainability-related claims. 

Linklaters - EU: European Commission launches Call for Evidence to simplify SFDR

The Commission published the Omnibus IV package on 21 May 2025. 

On 23 May 2025, the Commission launched a consultation on the part of the Omnibus IV package intended to delay the due diligence requirements under the Batteries Regulation. The consultation closes on 23 July 2025. 

The proposals for changes to the Batteries Regulation and F-gas Regulation will now need to be debated and agreed on by the European Parliament and Council under the ordinary legislative procedure, which normally would take around 18 months from proposal to formal adoption.

It is not clear at this stage whether any of these proposals will be “fast-tracked” in the same way that the “Stop-the-Clock” Directive was fast-tracked under the first Omnibus proposal. 

The Omnibus IV includes (among other things) proposed changes to the Batteries Regulation 2023 and the F-gas Regulation 2024, as well as measures aimed at a new category of small mid-cap companies (SMCs). 

In particular, the Commission is proposing to make the following changes to the Batteries Regulation and F-gas Regulation:

• Delay the date of application of the due diligence obligations in the Batteries Directive by two years, from 18 August 2025 to 18 August 2027.
• Delay the deadline for the Commission to publish guidance on the Batteries Regulation, from 18 February 2025 to 26 July 2026 (to align with the deadline for publishing guidance on the Corporate Sustainability Due Diligence Directive). 
• Expand the exemption from the due diligence requirements in the Batteries Regulation to companies with a net turnover of less than EUR 150 million. At present, companies having a net annual turnover of less than EUR 40 million are exempt from the due diligence requirements. 
• Limit F-gas Portal registration under the F-gas Regulation to importers that exceed certain annual F-gas thresholds and exporters of certain products and equipment with highly warming F-gases that are prohibited in the EU and are covered by an export restriction.  

The Commission has also proposed the creation of a new category of SMCs for companies that are larger than SMEs but smaller than large companies. The Omnibus IV package extends to SMCs some of the exemptions that are currently available to SMEs. However, this does not affect the Commission’s proposed changes to the Batteries Regulation and the F-gas Regulation or other EU sustainability regimes. 

Linklaters - EU: sustainability elements of the Omnibus IV proposal

The Commission published a Single Market Strategy on 21 May 2025, in which it identified fragmented rules on packaging, labelling and waste as one of the ten most harmful barriers to the free movement of goods and services in the EU. 

The Commission plans to address these issues primarily by making product labels clearer and more accessible and by simplifying extended producer responsibility (EPR) schemes for end-of-life products.

These changes will be made via a Circular Economy / Environmental Omnibus in Q4 2025 and a Circular Economy Act in Q4 2026.

It is possible that this Omnibus may also include changes to the existing Industrial Emissions Directive but this has not been confirmed yet. 

Linklaters - EU Single Market Strategy: dealing with fragmented rules on packaging, labelling and waste

It is not yet known if / when this will be published 

Our understanding is that the Commission is expected to publish an Energy Omnibus package but this has not yet been officially confirmed. 

It is possible (TBC) that this package may cover the:

• Methane Regulation;
• Renewable Energy Directive (RED);
• Energy Performance of Buildings Directive (EPBD); and 
• Energy Efficiency Directive (EED).

Formal complaint to European Ombudsman against Commission about first Omnibus process

A formal complaint  was filed with the European Ombudsman on 18 April 2025. 

The European Ombudsman announced on 21 May 2025 that it has opened an inquiry to investigate the complaint. 

A number of NGOs (including ClientEarth) filed a formal complaint with the European Ombudsman concerning how the European Commission prepared the first Omnibus proposal. 

The NGOs claim the Commission has breached its Better Regulation Guidelines by failing to justify why it did not carry out a public consultation or impact assessment on the draft legislation.

The complainants also argue that the Commission should have conducted a climate consistency assessment as foreseen by the European Climate Law. 

The European Ombudsman has asked the Commission a series of questions, focused on the stakeholder consultations listed by the Commission in the explanatory memorandum accompanying its legislative proposal. The questions include a request for more detail about which companies and stakeholders were invited to meetings with the Commission in early February 2025 and using what criteria. The Commission has also been asked to explain its decision not to carry out a public consultation.

The Ombudsman does not have enforcement powers but can use its inquiries to make recommendations to the Commission, which could possibly affect future lawmaking.

See NGO press release

See European Ombudsman press release