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🔎 Things to remember
On Wednesday February 26, the European Commission unveiled its first Omnibus bill. The stated aim? To simplify certain key regulations of the European Green Pact, often criticized for their administrative complexity and perceived by certain political and economic players as an obstacle to the international competitiveness of European companies.
This first text (the first of a series of three planned for 2025) specifically targets four pillars of the Green Deal: the CSRD directive on sustainability reporting, the CSDDD on corporate duty of care, the green taxonomy and the MACFthe carbon tax system at European borders.
In this article, we take a look at the main changes that companies can expect.
It is important to bear in mind, however, that this is only a draft directive at the moment, and that it may well evolve as it progresses through the legislative process.
What does the Omnibus law say about CSRD?
Whilethe dual materiality analysis —which has been at the center of much debate—was ultimately not called into question by the European Commission, the Omnibus Act proposes numerous changes in terms of the timeline, application thresholds, and the amount of data to be reported. Need help with your CSRD reporting? Discover Tennaxia’s CSRD software.
A. New Thresholds for Application
The first thing to bear in mind is that the European Commission wishes to considerably reduce the number of companies impacted by CSRD. It would align the thresholds with those applicable to CS3D, thus reducing by 80% the number of companies subject to this annual sustainability reporting obligation. This would only apply to companies with over 1,000 employees and generating sales of at least 50 million euros or a balance sheet of at least 25 million euros.
This new threshold would exclude from the CSRD some of the 1st wave companies that published their first report this year on 2024 data (probably from 2027 onwards), as well as companies in subsequent waves. Listed SMEs would also be excluded from the scope of the CSRD.
The thresholds for non-European companies would also change. Only those with over 1,000 employees and sales of at least 450 million euros would be concerned (vs. 150 million euros today).
B. A Deferral of Disclosure Requirements
Pending the progress of the legislative process aimed at ratifying these proposals, the Commission has suggested a "stop the clock" approach. This would involve postponing the obligations of companies in the 2nd and 3rd waves by 2 years.
Companies due to report for the 1st time in 2026 on 2025 data would thus have to publish in 2028 on 2027 data. Companies in the 3rd wave initially required to publish their sustainability report in 2027 on 2026 data would see this obligation postponed to 2029 on 2028 data. Nevertheless, as the 3rd wave is made up of listed SMEs, there is a good chance that these companies will ultimately not be subject to CSRD once the Omnibus legislative process has been completed.
C. A voluntary standard based on the VSME
The Commission is also planning to adopt a voluntary standard for companies now outside the CSRD application thresholds. This standard, to be published in the form of a delegated act, is expected to draw heavily on the VMSE standard already published by EFRAG and targeting SMEs. It is a simplified version of the CSRD, which the European Commission considers better suited to this type of structure.
D. A reduction in the data required under the CSRD
With regard to the number of data points requested in CSRD reports, companies still affected by the standard would see their number reduced by around 70%. A request has been made to EFRAG to better target the data points in the various ESRSs and thus reduce their quantity. It is likely that narrative information will be the first to be impacted by these changes.
The sector standards on which EFRAG is currently working, and which were due to be published in June 2026, have been discontinued.
E. A Comprehensive Review of the Audit Processes for CSRD Reports
Hearing the numerous complaints from companies about the cost of auditing CSRD reports, the Commission has proposed in this bill to remain at a limited assurance level. The move to reasonable assurance, which was due to take effect from 2028, has therefore been abandoned.
By 2026, the European Commission plans to publish guidelines, rather than a standard, on how sustainability reports should be audited.
F. A “value chain cap” to protect small and medium-sized enterprises
Still with the aim of simplifying administrative procedures for SMEs, the European Commission is planning to introduce a "value chain cap". The aim of this system is to limit the amount of data that large groups can request from SMEs as part of their customer-supplier relationship. The underlying aim is to ensure that SMEs are not obliged to report at the same level as large groups, as a trickle-down effect.
A benchmark based on the VSME will constitute the standard of information that it will be possible to request from companies with fewer than 1,000 employees that are part of the value chain.
How does the Omnibus law impact CSDDD?
The Omnibus Directive also proposes to make far-reaching changes to the obligations of companies linked to the European Duty of Vigilance Directive, which was originally scheduled to come into force gradually between 2027 and 2029.
A. A delay in the implementation of CS3D
Transposition of the directive into the national law of the various EU member states was originally scheduled for July 26, 2026. The Omnibus suggests extending this transposition deadline by one year, in order to incorporate the amendments linked to this new law.
This also implies a postponement of the CSDDD's entry into force to 2028. The 1st and 2nd waves of companies concerned should therefore be subject to it simultaneously from 2028, as opposed to 2027 for the 1st wave initially.
B. A Narrowing of the Scope of Vigilance
The European Commission is proposing to reduce the scope taken into account in risk assessment.
While companies were initially required to exercise due diligence in respect of human rights and environmental protection across their entire value chain, after modification this duty would only apply to direct trading partners, except in the case of plausible information suggesting negative impacts beyond tier 1 of the value chain.
The Commission also suggests limiting/reducing mandatory stakeholder participation in certain stages of the due diligence process.
C. Simplified Content
Companies will be able to request the information they need from their suppliers to meet their obligations. However, if the latter have fewer than 500 employees, the content of the information will have to be based on the future VSME referential. As with the CSRD amendment, the aim is to limit the obligations to which SMEs could be subject as a result of the trickle-down effect. However, it remains possible to request additional information on a subject if it is not included in the VSME.
As part of the process of building a dialogue with the various stakeholders, the Commission suggests limiting the definition of stakeholders to workers, subsidiaries, business partners and affected individuals and communities. This excludes consumers, human rights and environmental organizations.
D. An expanded inspection schedule
The evaluation of suppliers and the effectiveness of the vigilance system would be carried out every 5 years, as opposed to every year initially.
E. A less restrictive environmental transition plan
In its initial version, the CSDDD required companies to draw up and implement an environmental transition plan in line with the objectives set out in the Paris Agreement.
The Omnibus directive does not call into question the obligation to draw up a transition plan, but makes its implementation voluntary.
F. A More Flexible System of Sanctions
Companies would no longer be held liable for actual environmental damage or human rights violations in their value chain.
The Commission is also proposing to break the link between financial penalties and company sales, thereby removing the 5% ceiling initially provided for in the directive.
Finally, in the event of proven damage, termination of the commercial relationship with the supplier as a last resort would be replaced by temporary suspension.
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What impact will the Omnibus law have on Green Taxonomy?
The European taxonomy would also undergo some changes.
As a reminder, the aim of this directive is to provide investors and financiers with homogeneous and comparable information. The idea is to redirect financial flows towards activities considered to be green within the meaning of this taxonomy.
A. New Thresholds for Application
Initially, the thresholds for applying the taxonomy corresponded to those of the CSRD. The Commission is proposing to establish a new threshold, uncorrelated with the CSRD. This would apply to companies with over 1,000 employees and sales in excess of 450 million euros.
The approach will be voluntary for companies below these thresholds.
B. Simplifying the content to be published
The Commission is aiming for a 70% reduction in the information to be published in the taxonomy report. In particular, it has opened a public consultation so that companies can provide feedback on the report's format and content.
It could also become possible to publish information on activities not yet aligned but well on the way to being so (i.e. partially aligned).
OpEx should no longer be part of the information requested as part of the taxonomy. Companies will still be able to provide this information on a voluntary basis. The analysis will therefore focus on sales and CapEx.
The scope of activities to be taken into account could also change, by excluding non-material activities (i.e. representing less than 10% of sales, CapEx or OpEx).
C. A Review of the DNSH Criteria
To be aligned with the taxonomy, companies must prove that they have no negative impact on the objectives of the green taxonomy. This is the principle of DNSH for Do Not Significant Harm.
As the "pollution prevention and control" objective is considered too complex and restrictive for many companies, the Commission has opened a second public consultation aimed at simplifying the associated criteria.
D. A New Method for Calculating the GAR
Financial companies were initially required to publish information on all the companies in their portfolios in order to calculate their GAR (Green Asset Ratio), which corresponds to the proportion of taxonomically responsible investments in their total investments.
The Omnibus directive suggests that only companies subject to the CSRD should be included in this calculation.
What changes has the Omnibus law made to the MACF?
The Border Carbon Adjustment Mechanism (BCAM) will also be affected by the Omnibus Directive. This scheme aims to tax imports of products with highCO2 emissions within the European Union, in order to prevent carbon leakage and encourage decarbonization of industry.
A. A New Threshold for Application
The Omnibus Directive proposes to apply the tax only to companies importing a minimum of 50 tonnes of products per year. This threshold will exempt 90% of importers from the carbon tax.
Previously, this threshold was set at €150 per import. The Commission considered that this threshold was insufficient to exclude occasional importers of small quantities from the scope of the MACF, who are therefore subject to too heavy an administrative burden. It also felt that monetary value was not a suitable indicator for a scheme targeting intrinsic emissions from goods.
Nevertheless, despite this new threshold, the Commission indicates that the tax would still cover 99% of emissions from the sectors concerned by the scheme: steel, cement, aluminum, nitrogen fertilizers and hydrogen.
The Commission's proposal also provides greater flexibility for importers who are around the 50-tonne mass threshold for imported MACF goods. They will be able to declare themselves as "occasional importers", but apply for "MACF declarant" status at any time if they feel they are in danger of exceeding the 50-tonne threshold.
B. A Strengthened Oversight System
The proposal provides for a new, more robust control system, based on customs data obtained from the European monitoring system. The Commission and the competent national authorities are jointly responsible for monitoring occasional importers, and those who exceed the threshold.
If the threshold is exceeded, the Commission will alert the national customs authority, which may block the imports concerned. Occasional importers without prior authorization would incur a penalty and would have to obtain authorized declarant status to continue their activities.
This system is designed to prevent circumvention of the rules, in particular through the artificial splitting of imports.
C. Simplifying the Authorization Process for Registrants
The measures proposed by the Commission aim to simplify the authorization of registrants in 2 ways:
- Optional consultation: National Competent Authorities (NCAs) can choose whether consultation with other NCAs or the Commission is necessary, whereas previously it was mandatory. The aim is to speed up the authorization process.
- Introduction of a MACF representative: MACF importers and declarants can delegate the submission of their declarations to a third party. This does not absolve them of their obligations, but it does reduce costs and the administrative burden.
D. A Simplification of the Method for Calculating Emissions
The Commission has proposed a package of measures to simplify the calculation of GHG emissions from products subject to the MACF.
- Exclusion of non-calcined clay: Deletion of non-calcined kaolin clay from the MACF scope, as it contains little carbon and therefore generates an unnecessary administrative burden.
- Use of default values for indirect emissions: Removal of the possibility for the Commission to adopt implementing acts relating to the method of calculating emissions after the transitional period, avoiding complex proof and assessment procedures.
- Data on intrinsic emissions: Adoption of a realistic approach based on real data or the best available data, to overcome data collection difficulties in non-EU countries.
- Alternative default values: Setting reference values based on the least efficient installations to avoid more favorable treatment for countries without reliable data.
- Emissions calculation for aluminum and steel: Exclusion of final production processes, simplifying emissions reporting for these sectors.
- Exemption for precursors produced in the EU: Allocation of zero intrinsic emissions to precursors (MACF products used as raw materials in the production of other MACF products) already subject to the SEQE, avoiding double counting.
- Emissions verification: Deletion of default verification to reduce unnecessary costs.
- Exclusion of indirect electricity emissions: Clarification that only direct emissions are taken into account for electricity, as the system targets producers, not consumers.
E. Simplification of Reporting Requirements
Reporting requirements would also be simplified with two main measures.
The deadline for filing annual MACF declarations will be adjusted: declarations and surrenders of certificates must be made by August 31, redemption by September 30, and cancellation of certificates by October 1.
Access to the MACF register has been improved, by facilitating access for third-country operators and creating specific access for accredited verifiers.
F. Simplification of Financial Requirements
The Commission's text aims to simplify the management of MACF certificates by easing reporting obligations. The rule requiring certificates covering 80% of emissions to be bought back at the end of each quarter has been lowered to 50%. Registrants will also have greater flexibility in their choice of calculation method, and the limit on certificate redemption will be adjusted.
Finally, the start date for the sale of certificates has been set at 2027, instead of the original January 1, 2026.
What legislative path will this Omnibus law take?
The European Commission has indicated that it is proceeding with a "level 1" reopening of these key texts of the European Green Pact, i.e. a global renegotiation of these legislations by the co-legislators: the European Parliament, the Council of Europe and the European Commission.
This implies that the process of validating this law will almost certainly be a lengthy one, given the many disagreements between countries and parties on these texts. Nevertheless, the Commission has asked for a "fast track" process to speed up discussions, which could lead to adoption by autumn 2025.
It should be noted, however, that the bill may be amended in depth throughout its legislative process, in order to secure a majority among the various European legislators.
For the CSRD, pending amendments to the various texts, the directive's current rules still apply in the 20 European countries where it has been transposed into national law. The legislative process is expected to take several months, and EU member states will then have 1 year to transpose these changes into national law.
So, for the time being, companies in the "1st wave" that published this year, as well as those in the "2nd wave" (those subject to CSRD for the first time in 2026 on 2025 data), must still consider that the initial text is applicable.