With the omnibus proposal, the EU Commission plans to simplify ESG regulations, reduce bureaucracy and optimize sustainability reporting – we analyze the latest developments.
At the end of 2024, EU Commission President Ursula von der Leyen announced the so-called “omnibus proposal” in a speech. The aim is to streamline and simplify the existing ESG regulations – in particular the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CS3D) and the EU taxonomy. Surprisingly, the proposal also included changes to the Carbon Border Adjustment Mechanism (CBAM).
To give the North Rhine-Westphalian mechanical and plant engineering industry an overview of the far-reaching changes resulting from the EU omnibus proposal of 26 February 2025, ProduktionNRW organized a virtual information event on 20 March 2025.
Omnibus proposal – simplification and reduction of bureaucracy under the CS3D, CSRD, EU taxonomy & CBAM
Frederike Krebs, speaker at VDMA Brussels, provided insights into the current political process and assessed the potential impact on the mechanical and plant engineering industry. The omnibus proposal is a rarely used instrument at EU level to combine and revise several EU legal acts in a single legislative procedure.
A central component of the proposal is the so-called “Stop the Clock” approach, which provides for a postponement of the reporting obligations for companies of the second wave of the CSRD by two years and a postponement of the CS3D implementation by one year to 2028. Overall, the omnibus proposal aims to focus the scope of sustainability reporting more on large companies. According to the current proposal, around 80 percent of companies would fall outside the scope of CSRD, meaning that reporting obligations would focus on companies with the greatest social and environmental impact.
In addition, the EU Commission assumes that the planned measures could save up to 6.3 billion euros in administrative costs each year. At the same time, the simplification is expected to release up to 50 billion euros in public and private investment to support environmental and economic policy goals.
Next steps in the legislative process
The legislative proposals on the aforementioned dossiers will now be submitted to the European Parliament and the Council for examination. Adjustments may be made, but the aim is to implement them as soon as possible. The “Stop the Clock” proposal is to be discussed as early as the second quarter of 2025.
Exchange of experience and discussion
The following topics in particular were addressed in the concluding discussion
- Reduction of reporting obligations: The number of data points to be reported is to be reduced, but this still requires concrete elaboration.
- Specification of reporting obligations in the CS3D: Until now, transparency had to be established along the entire supply chain, including indirect suppliers. According to the new proposal, however, only direct business partners will be subject to the requirement.
- Reporting obligations for groups with multiple subsidiaries in the EU: There was also a need for clarification regarding consolidated reporting within groups with multiple locations.
The event made it clear that the mechanical and plant engineering sector is highly affected by the planned changes. Due to the high level of interest and the unanswered questions, a follow-up event on further developments was requested.
Organizer
The event is organized by ProduktionNRW. ProduktionNRW is the cluster for mechanical engineering and production technology in North Rhine-Westphalia and is organized by VDMA NRW. ProduktionNRW sees itself as a platform for networking, informing and marketing companies, institutions and networks with each other and along the value chain. Significant parts of the services provided by ProduktionNRW are funded by the Ministry of Economic Affairs, Industry, Climate Protection and Energy of the State of North Rhine-Westphalia.