In recent weeks, the European Commission has presented a reform package known as “Omnibus,” with the main goal of simplifying ESG reporting regulations and increasing the competitiveness of companies operating within the European Union. The proposed changes primarily affect the Corporate Sustainability Reporting Directive (CSRD) and the Carbon Border Adjustment Mechanism (CBAM).
Key changes related to ESG reporting (CSRD):
- Raising qualification thresholds – The ESG reporting obligation will apply only to large companies employing more than 1,000 people and having a balance sheet total exceeding EUR 25 million or net revenues above EUR 50 million. As a result, the number of companies required to report will decrease by about 80%.
- Postponement of regulation implementation deadlines – The Commission has proposed a two-year delay in the start of mandatory ESG reporting for companies that were originally scheduled to report for the first time for the year 2025 or 2026.
- Limiting the scope of information required from value chain suppliers – Companies will not be allowed to demand ESG data reporting from their contractors beyond the standards defined by the European Commission in the voluntary Sustainable Reporting Standard.
Proposed simplifications to the CBAM mechanism:
- Introduction of a minimum threshold (so-called de minimis threshold) – Importers bringing in CBAM-covered goods in quantities not exceeding 50 tons annually will be exempt from the CBAM obligations. Thanks to this change, around 90% of importers, mainly small and medium-sized enterprises, will be excluded from the reporting obligation, while still covering over 99% of emissions under the regulation.
- Simplification of administrative procedures for importers – The changes will include easier entity authorization and simplification of methods for calculating embedded emissions in imported goods.
Expected impact:
The implementation of these changes should reduce companies’ administrative burdens by at least 25%, and by about 35% for small and medium-sized enterprises (SMEs). It is estimated that the cost savings resulting from the new regulations will amount to approximately EUR 6.3 billion annually, additionally triggering public and private investments of up to EUR 50 billion.
However, it is important to note that these proposals still require approval by the European Parliament and the EU Council, which may affect their final form. Companies should closely monitor developments and prepare for potential changes in ESG and CBAM regulations.