EU’s Omnibus package: Regulatory simplification in sight, but uncertainty remains

A New Chapter for Sustainability Legislation

In February 2025, the European Commission presented the Omnibus packages to enhance the EU’s competitiveness by reducing the administrative burden tied to its three flagship sustainability regulations: CSRD, CS3D and the EU Taxonomy Regulation. As part of the first Omnibus package, the European Parliament and the Council adopted the so-called “Stop-the-clock” directive in April 2025. The “Stop-the-clock” directive delays the application dates of certain reporting and due diligence requirements, as well as the transposition deadline for due diligence provisions. With this temporary reprieve in place, attention now shifts to the more complex task of reaching an agreement on the substance of the reforms. Key questions remain to be agreed upon, and the proposed changes could significantly impact companies’ compliance efforts.

What Happens Next? Political Complexity Ahead

While the Omnibus package is designed to simplify sustainability reporting obligations, its progress is hampered by political challenges and procedural hurdles. The European Parliament and the Council must first agree on the final wording of the proposed changes before formally adopting the text. Notably, both institutions have proposed stricter thresholds for which companies are subject to CSRD and CS3D requirements than the Commission’s initial proposal. The Council adopted its negotiating position on 23 June, while the Parliament has yet to define its own.

The Committee on Legal Affairs (JURI) is the lead committee within the Parliament for this file. On 12 June, the Parliament’s Omnibus rapporteur Jörgen Warborn, member of the European People’s Party, published a report proposing amendments that further reduce sustainability reporting and due diligence obligations. Warborn’s position goes even further than the Council’s in advocating regulatory simplification, with a clear emphasis on enhancing the EU’s global competitiveness. While the report remains subject to change and must first be adopted by the JURI committee, it serves as the initial basis for the upcoming negotiations. A plenary vote in the European Parliament is tentatively scheduled for 13 October 2025. However, the Parliament is deeply divided: far-right groups push for a complete repeal of CS3D, while liberals, socialists, and greens seek to preserve the current framework. With no single majority, cross-party compromise will be essential. As a result, both the timeline and the scope for final adoption remain uncertain.

Once the Parliament adopts its position, trilogue negotiations with the Council and Commission will follow, likely at the end of 2025. There are currently no indications as to how long these negotiations will take. In a best-case scenario, the final adoption vote will occur in the first or second quarter of 2026.

The Final Outcome Remains Uncertain

The publication of the Omnibus package marks a key milestone in the EU’s effort to streamline sustainability rules. Yet, the path forward is far from settled. Complex political dynamics, both within the Parliament and among EU institutions, make it difficult to predict the legislation’s final form. It is likely that the final text will introduce additional regulatory simplifications compared with the Commission’s original proposals. What is clear, however, is that this initiative is a political priority for the EU. Companies and stakeholders should stay vigilant and actively engaged, as the coming months will be decisive in shaping the future scope and requirements of sustainability regulation across the EU.