The Omnibus Simplification Package was proposed in February 2025 as a response to concerns over the complexity in sustainability regulation. However, its future remains uncertain following a narrow parliamentary rejection in October 2025.
We previously brought together hundreds of sustainability specialists in our webinar “EU Omnibus: Key Changes in CSRD, CSDDD & EU Taxonomy and How to Adapt” to see what their game plan is moving forward. According to our findings, 70 percent will keep pushing forward with sustainability efforts despite EU Omnibus challenges, and over 80 percent see sustainability data as more than just compliance.
This package doesn’t only change existing rules but also alters the whole game regarding the CSRD, CSDDD, EU Taxonomy, and CBAM.
So what are the latest changes and how should you prepare for the updates?
Latest update: October 2025
On October 22, 2025, the EU Parliament rejected the proposed Omnibus package in a narrow vote (318-309). The package will return for a full parliamentary vote on November 11-13, 2025, with the possibility of amendments. The final outcome remains highly uncertain, and businesses should prepare for multiple compliance scenarios.
The EU Omnibus Simplification Package was proposed in February 2025 as a response to concerns over the complexity in sustainability regulation. However, in October 2025, the EU Parliament rejected the negotiating mandate, sending the package back for reconsideration. The final outcome remains uncertain, but if eventually adopted, it would significantly change what you know about sustainability reporting.
- Non-EU companies maintain their original reporting timeline, with first reports due in 2029 for the 2028 financial year, while the proposals focus primarily on reducing the scope for EU companies.
- For EU companies, the proposed coverage thresholds have increased to both €450M in annual revenue and 1,000 employees. That’s a reduction of about 90 percent, from nearly 50,000 to some 5,000 organizations.
The change comes after strong lobbying from U.S. stakeholders who want to make cross-border compliance easier. A strong push from trade negotiations and the desire to reduce regulatory hurdles for American firms operating in Europe also played into the overhaul.
Note that these changes are still not finalized. You can expect another 12 to18 months for the negotiation period before any new requirements take effect. The next parliamentary vote is scheduled for November 11-13, 2025, and could include further amendments before trilogue negotiations begin
Under proposed changes, CSRD reporting will apply to fewer companies
Initially, the CSRD impacted almost 50,000 companies. If the Omnibus is eventually adopted, this figure drops down to a mere 1,000. The current thresholds state that companies having both 1,000+ employees and more thanover €450M+ turnover have to adhere to the requirements.
Looking at the manufacturing space, most mid-sized and even some large companies will now be exempt, especially those with less complex or smaller workforce footprints.
So while there’s less reporting, let’s be clear: your clients and investors still want data. Companies outside the scope may still find voluntary, CSRD-aligned reporting valuable for mapping risks and opportunities throughout their manufacturing and sourcing activities.
“The CSRD is not just a bureaucratic exercise; it’s a strategic opportunity to improve risk management and resilience.” — Vittorio Allegri, Regulatory Expert at FTI Consulting.
“CSRD is such an enormous undertaking. Uncertainty shouldn’t lead you to change your current efforts in large part” — Samuel Shiroff, Senior Director, Global Sustainability at EnerSys.
CSDDD compliance requirements stand strong
The Corporate Sustainability Due Diligence Directive (CSDDD) takes into account the responsibility businesses have for the impacts of their entire supply chain on the environment and human rights. However, with the new law, things just got a bit easier:
Now companies need to conduct due diligence only when it comes to their direct suppliers, and not the entire value chain.
Monitoring exercises on their direct business partners were also dropped from yearly to once every 5 years.
Firms will no longer be civilly liable for non-compliance. Added to this, the compliance deadline has now been extended to 2028, providing more time for companies to prepare the data and reporting they need to comply.
That being said, companies still have to outline concrete sustainability action plans. With the new rules, however, the proposal limits national flexibility to ensure further harmonization among Member States.
Manufacturing supply chains will be affected by compliance requirements focused solely on direct suppliers rather than the entire chain, and monitoring will shift from annual to every five years for direct business partners.
For manufacturing companies, this means that mid-sized firms with complex supply chains but fewer than 1,000 employees or €450M turnover will likely be exempt. However, they may still face data requests from larger customers that remain in scope.
Important October 2025 CSDD Update: The Parliament’s Legal Affairs Committee has proposed dramatically higher thresholds for CSDDD compliance as well. Under their proposal, only companies with 5,000 or more employees and €1.5 billion in sales would be subject to CSDDD. This is a significant increase from the initially proposed 1,000 employee threshold. This would limit due diligence requirements to only the very largest corporations.
Note: These dramatically higher thresholds (5,000 employees and €1.5 billion) represent the Parliament’s position but are still subject to trilogue negotiations with the Council and Commission, who have proposed lower thresholds.
But before you leap into action, consider the timelines around legalizing these changes:
“I expect long and complicated negotiations (12-18 months), especially because this time they are negotiating CS triple D, CSRD, and taxonomy, at least in part, all together, which makes the realm of possible negotiation tactics even larger.” — Vittorio Allegri, Regulatory Expert at FTI Consulting.
Expect fewer obligations for the EU Taxonomy
There’s also some loosening up in the EU Taxonomy. Reporting becomes mandatory only for those firms that turn over more than €450M in annual revenue.
A 10 percent threshold of materiality allows companies to disregard immaterial matters in terms of their sustainability impact. Plus, the Do-No-Significant-Harm criteria on chemicals are removed.
Small caveat here: Investors will still want to see successful sustainability efforts. Companies that can’t afford to opt out of voluntary reporting may sacrifice their investors’ confidence so voluntary disclosures may still be the way to go for EU Taxonomy adherence.
“The Commission’s proposal to introduce a materiality threshold for Taxonomy reporting will allow companies to focus on significant eligible activities, which will be more interesting for investors and stakeholders.” — Vittorio Allegri, Regulatory Expert at FTI Consulting.
CBAM will make things easier for small importers
The European Union’s Carbon Border Adjustment Mechanism (CBAM) was designed to prevent carbon leakage by imposing a carbon price on imported goods from countries with less stringent climate policies.
If you import below the threshold of 50 tonnes annually (per importer), you’ll be exempt. This eliminates CBAM obligations for approximately 182,000 or 90 percent of importers, mostly SMEs, while still covering over 99 percent of emissions in scope.
For those still within the scope, there are simpler rules for CBAM declarant authorization and CBAM obligations, including embedded emissions calculations and reporting requirements. This adjustment will lay the groundwork for a future expansion of CBAM to additional ETS sectors and downstream goods, followed by a new legislative proposal on the scope extension of CBAM in early 2026.
How to stay ahead of these EU Omnibus Simplification Package changes
Even with the EU Omnibus Simplification Package easing compliance by a lot, business interest in these particular sectors stays unshaken. The most natural course of action to keep up and adhere to the changes should be:
- Given the October 2025 rejection and ongoing uncertainty, communicate clearly with stakeholders that: (1) the Omnibus proposal is not yet law, (2) the timeline has been extended, (3) the final scope of changes is still being negotiated, and (4) your company should prepare for multiple scenarios while continuing sustainability efforts.
“Communicate that there’s uncertainty in a legislative process. Your senior executives, I guarantee, understand that because in almost all major regulatory regimes right now there’s a lot of uncertainty. Focus on what the major hurdles are. Get that going. Be happy if you have more time.” — Samuel Shiroff, Senior Director, Global Sustainability at EnerSys.
- Look into automating sustainability reporting: Even if there are fewer reporting requirements, large customers and investors will still demand transparency. Tracera’s ESG tool helps with compliance and integrates multiple frameworks, regulations, and directives (e.g. CSRD, CBAM, CSDDD, and more).
- Stick to your due diligence needs: Your immediate suppliers will always need to answer your large corporate client inquiries. Prepare to keep responding to sustainability inquiries from both buyers and investors without having a directive leading these.
- Monitor carbon footprints on a product level: Possible third-party verification issues concerning sustainability claims and consumer protection regulations (such as the EU’s Green Claims Directive) will require proof of materials and vendor emissions data for sustainable products.
- Closely monitor regulatory developments as the Omnibus and CSRD proposals: These will face a 12–18 month negotiation period through 2026, with further changes possible.
- Invest in flexible data systems: Solutions like Tracera can help you keep up with future reporting criteria. Even if you’re now exempt, this will help you maintain supply chain visibility and gain investor confidence.
And remember: Even if your business is exempt, you should still start looking into how you gather and report on supply chain emissions. This will prepare you for future changes which is especially important given how often new additions occur.
Sustainability work is here to stay despite proposed compliance changes
With negotiations ongoing and the outcome uncertain, companies should maintain momentum on sustainability data collection and prepare for multiple compliance scenarios. Even if thresholds increase as proposed, market demands for sustainability data from customers and investors will persist regardless of regulatory requirements.
Keep your organization proactive, continue to invest in automation and prioritize reporting on sustainability initiatives to avoid being taken aback by regulators.
Get a Tracera demo today to see what the future of sustainability looks like within your organization.