TAE Statement on the EU Environment Omnibus

The EU Environmental Omnibus Package is ultimately an admission by the EU Commission that the EU's legal framework for sustainability has become too complex and burdensome. For years, the Taxpayers Association and businesses have been warning that the increasing accumulation of Green Deal legislation – from CSRD to due diligence to EU taxonomy – risks creating a regulatory jungle that imposes massive additional costs and undermines Europe's competitiveness without making a substantial contribution to combating climate change outside Europe.

The Environmental Omnibus Package is a step in the right direction, containing some technical adjustments, but it does not fundamentally solve the problem. European companies continue to face overlapping reporting requirements, legal uncertainty and rising compliance costs, which are ultimately passed on to taxpayers and consumers.

If Europe really wants to strengthen its economy and become a global role model for sustainable policy, it must go beyond cosmetic simplifications. Only if Europe develops solutions that are marketable worldwide will consumers, suppliers and countries follow suit. What is needed is a genuine reduction in regulatory burdens and a sustainability framework that is economically realistic, proportionate and globally competitive. Otherwise, the EU runs the risk of driving its own economy into stagnation through regulation.

Facts about the EU Environmental Omnibus
(EU Environmental / Sustainability Omnibus)

1. The Omnibus is an amendment to existing Green Deal legislation

The EU Sustainability Omnibus is not a new law, but a package of amendments to existing ESG rules.

Regulations affected:

• CSRD – Corporate Sustainability Reporting Directive
• CSDDD – Corporate Sustainability Due Diligence Directive
• EU Taxonomy Regulation
• Partially also CBAM and sustainable finance rules.

The EU Commission's objective:

• Simplification of rules
• Reduction of administrative burdens
• Strengthening the competitiveness of the EU.

2. Significantly fewer companies will have to report

One of the most important changes concerns the thresholds for sustainability reports.

New criteria (CSRD):

• Companies with more than 1,000 employees
• and €450 million in turnover.

This drastically reduces the number of companies affected:

• Previously expected: approx. 45,000–50,000 companies
• After the omnibus bill: approx. 10,000 companies.

➡️ This represents a reduction of around 80% of the companies originally affected.
 

3. Postponement of reporting obligations

The omnibus also includes a postponement of implementation.

Example:

• CSRD reporting postponed by two years for many companies.

This so-called "stop-the-clock directive" was already adopted in 2025.

4. Supply chain rules now only apply to very large corporations

The Corporate Sustainability Due Diligence Directive (CSDDD) has also been watered down.

New thresholds:

• more than 5,000 employees
• more than €1.5 billion in turnover.

This means that the directive now only applies to very large multinational companies.
 

5. The omnibus was introduced due to competition issues

The political background:

Many Member States and companies argued that ESG regulation:

• too complex
• too expensive
• and a competitive disadvantage compared to the US and China.

That is why the Commission launched an EU-wide simplification agenda in 2025.
 

6. Even critics acknowledge that Green Deal rules remain in place

The omnibus does not abolish ESG laws, it:

• reduces the scope
• postpones deadlines
• simplifies reporting.

The fundamental architecture of

• CSRD
• CSDDD
• EU Taxonomy

remains unchanged.
 

7. The costs of regulation are considerable

Example from national analyses:

• The implementation of the CSRD in Germany alone has been estimated at
  at approximately €1.6 billion in bureaucratic costs.

Companies also report

• annual compliance costs of around €300,000 per company.

Brief summary from the TAE's perspective

These facts support three key points and demands made by the Taxpayers' Association:

1. The EU has effectively established a very complex ESG regulation.
2. The Omnibus is a political response to bureaucracy and competition problems.
3. The reform reduces some rules, but does not eliminate the system.

➡️ It is precisely these three points that form the strongest realpolitik framework for criticism by organisations such as the Taxpayers Association of Europe.

Update on the EU Environmental/Sustainability Omnibus

1. Status of the Omnibus Package (very important)

The key point: the EU Sustainability Omnibus (Omnibus I) is no longer just a proposal, but has been politically decided.

• 26 February 2025: Commission presents omnibus proposal.
• 16 December 2025: European Parliament approves.
• 24 February 2026: Council gives final approval.

➡️ This completes the EU legislative process.
 

2. What the Omnibus has actually changed

The Omnibus is not a new environmental law, but an amendment to existing Green Deal rules.

Main legal acts affected:

• CSRD – Corporate Sustainability Reporting Directive
• CSDDD / CS3D – Corporate Sustainability Due Diligence Directive
• EU Taxonomy Regulation
• Partial sustainable finance rules

Objective: Simplification and reduction of reporting requirements.
 

3. Specific changes (which are politically decisive)

Fewer companies affected

The threshold has been significantly increased.

Example:

• CSRD reporting only for companies with >1,000 employees
  → around 80% of the companies originally affected are no longer included.

Postponement of obligations

Some reporting obligations have been postponed.

• New deadlines in some cases until 2028.

Reduction in reporting obligations

• Fewer data points
• Less taxonomy reporting

• Less impact on SME supply chains.

Political objective of the Commission

The Commission has officially announced:

• 25% reduction in bureaucracy for businesses
• 35% for SMEs.
   

4. How the political debate is actually going

The omnibus is highly controversial.

Economic and taxpayer perspective

Argument:

• ESG rules are too complex
• Costs weaken competitiveness
• Simplification is necessary

Environmental and NGO perspective

Argument:

• Omnibus dilutes Green Deal standards
• Fewer companies have to take responsibility

Some critics even call the decision a "massive weakening" of the rules.
 

5. Assessment

The political reality: The omnibus is not a massive reduction in bureaucracy, but rather a regulatory rebalancing.

Result

The EU is thus attempting to achieve two goals at once:

1️⃣ Maintain the Green Deal
2️⃣ Improve competitiveness
 

6. Concern

• Although the omnibus reduces some obligations,
• but the fundamental regulatory architecture remains in place.
  
  

 Brussels/Munich, 12 March 2026