EU Omnibus Package - Need to know facts

28th February, 2025

The EU Omnibus package of proposals to reduce EU sustainability reporting and due diligence burden, boost competitiveness and unlock additional investment capacity was adopted by the European Commission on 26 February 2025. This proposes significant changes for corporates. While this still needs to go through final legislative approvals and more changes are expected, a summary of the key amendments proposed so far are outlined below. On a related note, the EU’s Clean Industrial Deal was also launched on 26th February 2025. It aims to integrate the EU’s ambitions on decarbonisation, sustainable products, circularity and access to critical materials into green growth across EU industry. It includes several regulatory and market instruments aimed at lowering energy prices, growing clean manufacturing, creating jobs and mobilising €100 bn to finance the clean transition. Again, more is to come on both of these emerging packages. This insight unpacks what we know so far about the EU Omnibus package.

What is the EU Omnibus package?

The Omnibus package of proposals is the first in a series aiming to address duplication and unnecessary complexity on reporting for business. These proposals aim to:

Meet the EU ambition of a sustainable transition while enhancing EU business competitiveness.
Focus regulatory requirements on the largest, highest environmental impact companies, while still enabling access sustainable finance for their clean transition.
Reduce the complexity of EU requirements for all businesses, notably SMEs and small mid-caps.

This package focuses on amendments to the Corporate Sustainability Reporting Directive (CSRD), EU Taxonomy, Corporate Sustainability Due Diligence Directive (CSDDD), Carbon Border Adjustment Mechanism (CBAM) and European investment programmes.

What does the EU Omnibus package mean for business?

CSRD

New raised thresholds for application – Under the proposal CSRD would only be mandatory for large undertakings or groups with more than 1000 employees and either a turnover above EUR 50 million or a balance sheet above EUR 25 million. This is expected to reduce the number of companies in scope by 80%. Those companies will be required to report against the European Sustainability Reporting Standards (ESRS), which are to be revised and simplified to reduce the number of datapoints.
Third country undertakings thresholds are to raise also to an in-scope branch increased from €40m to €50m and net turnover generated in the EU increased from €150m to €450m.
Undertakings or groups below the threshold for CSRD (companies with up to 1,000 employees) are encouraged to report voluntarily using a simplified standard still to be agreed and adopted as a delegated Act. This will be based on the EFRAG voluntary standard for SMEs (VSME).
Sector specific reporting standards, which were in development by EFRAG, will no longer be required to avoid an increase in the number of reporting datapoints required.

Value chain cap – Those companies in scope of CSRD will be limited to the information in the voluntary standard as a cap when requesting data from their value chain suppliers (with fewer than 1000 employees). This reduces the trickle-down reporting effect on smaller business.
New timeline – The reporting requirements for in scope undertakings or groups due to report in 2026 on FY 2025 data, is proposed to be postponed by two years to 2028. This is to give time for the Council, Parliament and Commission to agree the substantive changes proposed and for Member States to implement their appropriate legislative amendments reflecting the changes.
Removal of reasonable assurance – Moving beyond the current “limited assurance” requirement to “reasonable assurance” is to be removed, under the proposal.

EU Taxonomy

Voluntary Taxonomy reporting below certain thresholds – This is proposed for undertakings or groups with > 1000 employees and a net turnover up to €450m. Flexibility is also proposed for partial alignment and eligibility with new simplified templates and reduced data points to be agreed.
Financial KPIs – Bank Green Asset Ratio (GAR) – Proposal to exclude exposures relating to undertakings not under the scope of CSRD (< 1000 employees).
Simplified Do No Significant Harm (DNSH) criteria – This is proposed for pollution prevention and control related to the use of chemicals, subject to feedback from a pending public consultation.

CSDDD

Simplified due diligence – It is proposed to reduce the required frequency of supplier due diligence assessments (from 1 year to 5 years), streamline stakeholder engagement and remove the requirement to terminate business relationships as a last resort.
Engagement across supply chain tier partners – The proposal aims to reduce the requirement for in depth due diligence assessments beyond direct business partners in the value chain, unless adverse impacts have arisen or are likely.
Value chain cap on information requests – Similar to CSRD, supplier data requests to SME and mid cap companies (< 500 employees) should be limited to the VSME Standard.
Alignment with CSRD on Climate Transition Plan requirements – This is proposed to limit duplication across CSRD and CSDDD laws.
Removal of EU-wide civil liability regime – This will delete a harmonised EU regime for civil liability and instead, defer to national civil liability regimes. It also revokes the obligation on Member States to provide for representative actions by trade unions, NGOs or national human rights institutions on behalf of individual rightsholders.
Exclusion of financial services from the scope of CSDDD will remain, and will no longer be subject to review, as was planned.
New timeline – The proposal is to postpone by one year the Member State transposition deadline to 26 July 2027 and first phase of application for largest companies to 26 July 2028.

CBAM

Currently applies to preventing carbon leakage on imports into the EU of iron and steel, fertilizers, aluminium and cement.

Exemption from CBAM for small importers – This is proposed for thresholds under 50 tonnes/annum or 80 tonnes CO2e on average per importer. This is expected to exclude 90% of companies.
Simplification – For importers in scope reporting simplifications are to cover authorisation of declarants, calculation of emissions, reporting requirements and compliance with financial liability.
Extension in scope – A review is planned to assess extension of the current to other sectors in EU Emission Trading (ETS), downstream goods and indirect emissions.
Strengthening anti abuse provisions across national authorities.

InvestEU

Mobilising clean technology finance – An amendment to the InvestEU Regulation is proposed to increase the amount of financial guarantees that InvestEU can provide to support investments. This aims to mobilise up to €50 billion for the deployment of clean tech, clean mobility and waste reduction.

What are the next steps?

The omnibus package includes proposed changes to the laws below. As a next step the legislative proposals are to be submitted to the European Parliament and the Council for their consideration and adoption as a priority.

A proposal for a Directive amending the CSRD and the CSDDD;
A proposal which postpones the application of all reporting requirements in the CSRD for companies that are due to report in 2026 and 2027 (so-called wave 2 and 3 companies) and which postpones the transposition deadline and the first wave of application of the CSDDD by one year to 2028.
A draft Delegated act amending the Taxonomy Disclosures and the Taxonomy Climate and Environmental Delegated Acts subject to public consultation.
A proposal for a Regulation amending the Carbon Border Adjustment Mechanism Regulation
A proposal for a Regulation amending the InvestEU Regulation

The draft Delegated Act amending the current delegated acts under the Taxonomy Regulation will be adopted after public feedback and will apply at the end of the scrutiny period by the European Parliament and the Council.

How Davy Horizons can help

Davy Horizons sustainability advisors work with PLCs, large private companies, government bodies, semi-states, and not-for-profits to incorporate sustainability credibly in their business aligned to regulation, industry best practice and stakeholder demands. We provide sustainability consultancy services across all sectors and topics. Contact us at sustainability@davy.ie. 