EU: sustainability elements of the Omnibus IV proposal

On 21 May 2025, the European Commission published the Omnibus IV simplification package aimed at simplifying EU rules and reducing administrative burdens. It was accompanied by a press release, Q&As and Factsheet. 

This package forms part of a broader effort announced in the Commission’s Work Programme to cut the administrative burden by at least 25% for all companies and by at least 35% for SMEs. 

The Omnibus IV includes proposed amendments 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”) but it does not amend the Corporate Sustainability Reporting Directive (CSRD) or the Corporate Sustainability Due Diligence Directive (CSDDD). 

Batteries Regulation

The proposed amendments to the Batteries Regulation are provided in two separate proposals: 

• Proposal for a Regulation of the European Parliament and of the Council as regards the extension of certain mitigating measures available for small and medium sized enterprises to small mid-cap enterprises and further simplification measures (“SMC Proposal”); and 
• Proposal for a Regulation of the European Parliament and of the Council as regards obligations of economic operators concerning battery due diligence policies (“Battery Due Diligence Proposal”). 

For more information on the Batteries Regulation, see our previous blog post. 

1. SMC Proposal

The SMC Proposal proposes targeted amendments to eight legislative acts, including the Batteries Regulation. 

The Batteries Regulation sets due diligence rules for operators who must verify the source of raw materials used for batteries placed on the EU market. Companies having a net annual turnover of less than EUR 40 million are except from this requirement. 

The Commission has proposed to expand this exemption to companies with a net turnover of less than EUR 150 million. 

This approach to define SMC is different to the one used in other part of the Omnibus IV – in particular, the staff and balance sheet criteria are not applied because the exemption in the Batteries Regulation is also based on turnover only. 

Also, at present under the Batteries Regulation in-scope companies are required – on an annual basis – to review and make publicly available (including on the internet) a report on their battery due diligence policy. The Commission has proposed to amend this requirement so that it applies every three years instead of annually. This amendment would apply to all in-scope companies.

2. Battery Due Diligence Proposal

Under the Batteries Regulation, the due diligence obligations mentioned above apply from 18 August 2025. Also, the Commission is currently required to publish guidelines on these due diligence requirements by 18 February 2025. 

The Battery Due Diligence Proposal postpones the due diligence requirements until 18 August 2027, and the date of publication of the guidelines until 26 July 2026. 

The aim of this delay is to give companies more time and flexibility to transition and implement due diligence obligations, with the help of guidelines to be published by the Commission. 

The reason for introducing these amendments through a separate proposal may be the same as for the “Stop-the-Clock” Directive (under the First Omnibus package), i.e. to allow for these amendments to be approved more quickly. 

F-gas Regulation

The F-gas Regulation requires all importers and all exporters of products and equipment to register in the F-gas Portal. A valid registration in the F gas Portal at the moment of import or export constitutes a required license. 

The Commission has proposed to amend the F-gas Regulation so that the registration requirement for imported products and equipment is limited to those imports subject to reporting requirements (which include de-minimis thresholds). 

It is also proposing to remove the registration requirement for exported products and equipment, except if it concerns exports of certain products and equipment with F gases having a Global Warming Potential of 1,000 or more that are subject to an export restriction. Although this proposal applies to all companies, the Commission believes that it will mainly benefit SMEs and SMCs.

Next steps 

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. 

Recommendation on small mid-caps definition

The Commission noted in its press release that when SMEs grow beyond 250 employees, they become large enterprises under the current rules — and face a sharp increase in compliance obligations. This “cliff-edge” can discourage growth and limit competitiveness. 

The Commission has therefore suggested in a Recommendation a new category of small mid-cap companies (SMCs) with 250-749 employees. 

According to the Annex to the Recommendation, the SMC category shall be made up of enterprises that: 

• are not small and medium-sized enterprises in accordance with Recommendation 2003/361/EC;
• employ fewer than 750 persons; and 
• have an annual turnover not exceeding EUR 150 million or an annual balance sheet total not exceeding EUR 129 million.

This definition is referred to in some parts of the SMC Proposal, but not in the proposals for changes to the Batteries Regulation and the F-gas Regulation.