The EU Commission wants to simplify ESG requirements with the Omnibus Regulation. This update shows the current status and possible relief for companies.
With several omnibus proposals, the EU wants to ease the bureaucratic burden on companies – including with regard to sustainability and environmental requirements. The focus is on the Clean Industrial Deal and omnibus procedures, which significantly reduce the scope of regulation without abandoning the objectives of the Green Deal. The aim is to maintain regulations that are correct in terms of content while significantly reducing the administrative burden on companies.
To give the North Rhine-Westphalian mechanical and plant engineering industry an overview of the latest developments, ProduktionNRW organized a virtual information event on 12 December 2025.
Update on easing the burden of omnibus regulation
Judith Herzog-Kuballa, Team Leader Sustainability at VDMA, and Frederike Krebs, consultant at the VDMA Brussels office, explained the current political process and its impact on the industry. One focus was the first omnibus “Sustainability”, which provides for significant adjustments to CSRD and CS3D. The areas of application have been significantly narrowed down. The target values for reporting obligations vary depending on the position of the EU institutions: Commission, Council and Parliament propose different thresholds. As a result, the groups of companies affected differ.
What all approaches have in common, however, is that the reporting obligations will clearly focus on the largest companies in future. The EU taxonomy remains mandatory for companies subject to CSRD, while voluntary application is envisaged for others. With the final trilogue agreement, around 80 percent of the demands put forward by the VDMA have been implemented.
The new environmental omnibus, for which the VDMA has submitted its own position paper, was also presented. The aim is to simplify environmental reporting obligations as well as product and waste regulations. Plans include the abolition of the SCIP database and greater harmonization and digitalization of requirements, for example in the area of extended producer responsibility.
Further relief concerns the EU Deforestation Regulation (EUDR). The trilogue agreement of December 4, 2025 confirmed the “first-touch principle”, according to which the burden of proof lies with the distributor. Downstream actors are relieved and the date of application is postponed by one year.
Nevertheless, it was emphasized that ESG requirements from the market will continue to exist regardless of regulatory relief. The voluntary VSME standard is therefore becoming increasingly important for small and medium-sized companies, particularly in the supply chain. This standard offers a pragmatic introduction to sustainability reporting and is significantly less complex than many customer-specific ESG queries. The VDMA is developing industry-specific guidance on this, including in cooperation with the German Sustainability Code.
Finally, the speakers gave an outlook on the revised ESRS standard (ESRS is the reporting standard that companies subject to CSRD reporting requirements must apply) and the planned consultations that will take place at the beginning of 2026. Despite the simplifications already achieved, the VDMA sees a need for further adjustments in key areas.
Exchange of experience and discussion
Points for discussion: The VSME remains voluntary, but should in fact have a standardization effect in the supply chain and is considered significantly less burdensome. The complete abolition of Article 33 REACH is currently considered unrealistic; however, adjustments are expected as part of the REACH revision planned for 2026, in which the VDMA would like to get involved again.
It was also confirmed that the latest simplifications and the postponement of the EUDR have already been decided (trilogue agreement reached). The Plastics Regulation is scheduled to come into force in August 2026, until then the existing reporting obligations will continue to apply. The final ESRS are expected in summer 2026, meaning that companies currently have to use the existing versions as a guide. For companies that are no longer required to report, it was discussed whether it makes more sense to converge with the ESRS or switch to the VSME – whereby the VSME was assessed as a pragmatic and standard-compliant approach.
In summary, it can be seen that the current and planned regulatory adjustments are primarily aimed at reducing the burden on companies and implementing the reporting obligations in a practicable manner.
Further information
- Further information on the EU Environment Omnibus can be found here.
- Background information on the EUDR Regulation can be found here.
- Detailed VDMA background information on the Omnibus I package can be found here: EU Omnibus I: Changes to sustainability regulations adopted – vdma.eu – VDMA
Organizer
The event is organized by ProduktionNRW. ProduktionNRW is the cluster of 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.