On 26 February 2025, the European Commission presented the Omnibus I Package, a set of proposals aimed at simplifying the European regulatory framework on sustainability.
The objective is to make sustainability reporting, responsible supply chain management, sustainable finance, and low-carbon trade obligations clearer and more proportionate for companies, while reducing regulatory complexity and administrative costs.
The package is still under discussion by EU institutions and may undergo changes before its final adoption.
Regulatory context and the Omnibus Package: toward simplified european rules
In recent years, the European Union has developed an increasingly comprehensive regulatory framework to guide companies towards more sustainable and responsible practices. However, this evolution has led to growing complexity in compliance requirements and obligations for businesses.
The Omnibus I Package was created to address this complexity. Its goal is to simplify existing rules, reduce administrative burdens, and ensure that obligations are proportionate to company size and capabilities.
The EU seeks to strike a balance between environmental objectives and economic development, supporting the transition toward sustainable growth without undermining the competitiveness of European businesses.
The proposed amendments mainly affect the following regulations:
- CSRD (Corporate Sustainability Reporting Directive), which establishes corporate sustainability reporting requirements;
- CSDDD (Corporate Sustainability Due Diligence Directive), which imposes due diligence obligations across the supply chain;
- EU Taxonomy, which defines criteria for classifying sustainable economic activities; and
- CBAM (Carbon Border Adjustment Mechanism), which introduces a carbon price on imports from non-EU countries to reflect their embedded emissions.
Key proposed changes
CSRD
The CSRD requires certain companies to publish a sustainability report covering the environmental, social, and governance (ESG) impacts of their activities.
Under the Omnibus I Package, the CSRD scope would be significantly narrowed: mandatory reporting would apply only to companies with more than 1,000 employees, while listed SMEs would no longer be included.
The proposal also foresees substantial simplification of required disclosures, reducing the number of indicators. In addition, assurance and verification processes—currently among the most burdensome aspects—would also be lightened.
CSDDD
The CSDDD requires companies to identify, prevent and mitigate negative impacts on human rights and the environment throughout their value chain, including indirect suppliers.
The Omnibus I Package proposes a more targeted and proportionate due diligence approach, focusing on the company’s own activities, its subsidiaries, and direct business partners. Companies would no longer need to systematically assess indirect suppliers unless plausible information suggests potential negative impacts.
Moreover, monitoring the effectiveness of due diligence measures would be required every five years instead of annually, except in specific cases.
The proposal also removes the requirement to terminate business relationships in cases of severe and persistent negative impacts, replacing it with the option to temporarily suspend collaboration.
EU Taxonomy
Companies subject to the CSRD must disclose in their sustainability reports the share of revenue and investments linked to activities deemed sustainable under the EU Taxonomy. These disclosures help investors evaluate companies’ contributions to EU environmental goals.
Under the Omnibus I Package, the Commission proposes that only large companies with more than 1,000 employees and revenue above €450 million remain subject to mandatory reporting, while smaller companies could report voluntarily.
The Commission also proposes a 70% reduction in reporting templates and simplification of the DNSH (“Do No Significant Harm”) criteria, aiming to streamline reporting and reduce compliance costs.
CBAM
CBAM requires importers of carbon-intensive products—such as steel or cement—to declare the embedded CO₂ emissions and purchase CBAM certificates.
The Omnibus I Package introduces exemptions for small importers: those importing less than 50 tonnes per year of regulated goods will no longer be subject to CBAM obligations. For companies that remain covered, simplified procedures for calculating and reporting emissions are planned.
The changes related to CBAM were formally adopted in September 2025, unlike the other Omnibus I provisions, which remain under negotiation.
Current status of the Omnibus I Package
Part of the Omnibus I Package—known as “Stop the Clock”—was already approved in early 2025, postponing certain CSRD and CSDDD deadlines.
As for the rest of the Package, the Council and Parliament must evaluate the Commission’s proposal, suggest amendments, and adopt their official position. The Council has already done so, but the Parliament did not reach an agreement on its own position on 22 October and will vote again in plenary in November 2025.
Only after this vote can negotiations between the Parliament, Commission, and Council begin, with the aim of reaching a final agreement between late 2025 and early 2026.
How we can support you
The simplifications introduced by the Omnibus I Package mark an important step toward a more transparent and proportionate regulatory framework, but companies still need to fully understand and manage their environmental, social, and governance impacts.
In a rapidly evolving landscape, staying informed is essential—not only to ensure compliance, but also to identify opportunities for efficiency, innovation, and sustainable growth.
At Kyklos Carbon, we support companies throughout their sustainability journey: from understanding regulations and potential obligations, to data collection and analysis, sustainability reporting, and defining improvement strategies.
Contact us to learn more.
Greenwashing: how to recognize it and how to avoid it in your company