This week’s EU Omnibus developments
A rundown of who is saying what this week, and what more we know about plans to revise Europe’s sustainability rules
It’s been a week of fighting back by the European Commission.
The commissioner for economy and productivity, Valdis Dombrovskis, penned a letter defending the decision to skip the EU’s normal law-making requirements (like impact assessments and consultations) because the sustainability omnibus was too urgent.
The letter was addressed to the EU Ombudsman, Teresa Anjinho, who is currently investigating whether the Commission breached its own ‘Better Regulation Guidelines’.
Dombrovskis argued the those guidelines are “an internal toolkit and not legally binding requirements’, and that they permit for the derogation of best practice processes “in case of urgency”.
The Omnibus was adequately urgent, he continued, because of “the difficult economic situation faced by key productive sectors in the European Union, the intense competition from other jurisdictions, a deteriorating security situation and geopolitical environment, factual implementation challenges and updated impacts and costs – which, taken together, were to undermine the achievement of the rules’ objectives, while also eroding the viability and attractiveness of basing economic activity in the EU”.
The changes to the Corporate Sustainability Due Diligence Directive (CS3D) also needed to be enacted before the 2026 deadline for transposition into national law, Dombrovskis added.
Legal wins on Taxonomy
While the Commission continues to fight its corner with the Ombudsman, it won three other battles this week – all relating to the EU Taxonomy.
The Austrian government had taken it to court over the decision to include nuclear and gas in the list of activities that contributed to Europe’s climate objectives, while Client Earth was suing it for allegedly “unlawfully labelling the burning of forest biomass to produce energy, and the manufacture of bio-based plastics and chemicals used to make plastics as ‘sustainable’.”
The third case was brought by NGOs who were unhappy about the way the Taxonomy accounted for wind energy generation.
The General Court of Europe ruled on all three cases on Wednesday, siding with the Commission in every one.
More Omnibus positions crystalise
We got some more visibility on who is supporting and opposing the Omnibus this week, too.
FoodDrinkEurope’s sustainability director, Katrin Heeren, warned against watering down CS3D and the Corporate Sustainability Reporting Directive (CSRD), saying the current proposals to reduce the scope and protect smaller companies from information requests would “make it more challenging and complicated, not simpler”.
The food and drink industry is Europe’s largest, she pointed out, and many of the biggest companies in the space “would no longer be able to identify major risks along the supply chain if there are weaker requirements, and if not all data will be possible to obtain”.
Heeren said “the big majority of our members would like to see the scope maintained”.
Real Economy Progress reported on FoodDrinkEurope’s plans to launch a tool to help small firms report in line with the EU’s VSME standard, which were discussed on the same webinar.
More than 260 business scholars also issued a joint statement this week, urging Members of European Parliament to integrate science and academic evidence into their decision-making around the Omnibus.
The statement comes as negotiations heat up in Parliament, with daily meetings to try and establish an initial compromise position by the 13th October.
Meanwhile, America’s biggest capital markets regulator, the Securities and Exchange Commission (SEC) waded in to the discussion about CSRD and CS3D, saying there were “significant concerns” about their impact on US firms.
SEC chair Paul Atkins welcomed the “EU’s recent commitment to ensure that these laws do not pose undue restrictions on transatlantic trade, as well as efforts to streamline and simplify these laws” but said “further work remains to refocus regulatory regimes on the principle of financial instead of double materiality”.
Other developments
Elsewhere in the EU’s sustainability simplification process, a consultation closed this week on the proposed ‘environmental omnibus’, which seeks to streamline circular economy, industrial emissions and waste management laws.
It received nearly 120,000 responses.
The European Parliament also approved plans to take 90% of companies out of scope of the Carbon Border Adjustment Mechanism.