Simplification measures introduced under the European Commission’s Environmental Omnibus include proposed exemptions from the Packaging and Packaging Waste Regulation’s reuse targets, an evaluation of the Single-Use Plastic Directive’s success, and reduced scope and postponed deadlines for EU reporting requirements.
The Commission plans to support the implementation of the Packaging and Packaging Waste Regulation with a Frequently Asked Questions document; this will offer guidance on application dates, reuse targets, labelling requirements, PFAS testing, and other points raised in the call for evidence and bilateral exchanges.
Input from the call for evidence will also inform the adoption of implementing measures due in 2026 and 2027. These will account for the specific requirements of existing products and their regulations – for example, medicines with health and patient safety requirements.
The deadline for Member States to appoint an authorized representative in line with Article 45(3) of the Regulation has also been postponed to 1st January 2035.
After industry players questioned the potential impact of reuse regulations on plastic pallet wrappings and straps, stakeholders will now be invited to provide feedback on a draft Delegated Act exempting pallet wrappings and straps from 100% reuse targets. The Commission says it will consider additional flexibilities for other packaging formats, especially in applications where food safety and hygiene would prevent targets from being met.
The Commission will also complete an evaluation regarding the Single-Use Plastics Directive in 2027. It is set to determine whether the Directive has successfully reduces marine plastic pollution and improved circularity, and assess whether administrative burden could be reduced.
A specific call for evidence and public consultation will be launched in the coming weeks.
Furthermore, the European Council’s presidency and the European Parliament’s negotiators have come to a provisional agreement in hopes of simplifying sustainability reporting and due diligence requirements – in particular, to reduce the reporting burden and avoid trickle-down effects on smaller companies.
For example, companies are no longer obligated to adopt a transition plan for climate change mitigation.
The Circular Economy Act is expected to further reduce the extent of reporting requirements. Companies will only be asked to report on the products they make available, and the collection and treatment of the resultant waste, at a maximum frequency of once per year. It is also set to simplify measures concerning third party producers.
Regarding the Corporate Sustainability Reporting Directive, in which companies must report social and environmental risks, the Commission proposed to increase the employee threshold to 1000 employees and remove listed SMEs from its scope.
Co-legislators have agreed to exempt financial holding undertakings from its scope, add a net turnover threshold of over €450 million to relieve reporting burdens on undertakings, and introduce a transition exemption for ‘wave one’ companies – those required to start reporting from financial year 2024 – falling out of scope for 2025 and 2026.
The Corporate Sustainability Due Diligence Directive’s transposition deadline has been pushed back a year; now it will apply from 26th July 2028, with companies expected to comply with its measures by July 2029.
The Directive’s scope was not addressed in the Commission’s proposal, but co-legislators have considered that large companies are the best equipped to influence their value chains and absorb due diligence costs and burdens. As such, the provisional agreement increases the thresholds to 5,000 employees and €1.5 billion net turnover.
Additionally, the agreement introduces a review clause with the possibility of extending the scope of both the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive.
Companies are only required to identify and assess adverse impacts in their own operations, as well as those of subsidiaries and business partners. This no longer needs to be a comprehensive mapping exercise, the Commission says, but instead a more general scoping exercise.
These investigations should be based on ‘reasonably available’ information, which is hoped to reduce the burden of information requests on smaller business parters. If the identified risks are considered equally likely or severe in several areas, companies are also permitted to prioritize impacts on their direct business partners.
The provisional agreement has removed the EU harmonized liability regime and the requirement for Member States to implement liability rules if they are not already present in national law. Instead, a review clause has been inserted.
Co-legislators have also agreed on a maximum cap of 3% for a company’s net worldwide turnover. The Commission will issue the necessary guidelines.
“For years, European businesses have faced wave after wave of red tape,” explains Morten Bødskov, minister for Industry, Business and Financial Affairs of Denmark. “This has slowed green investments and weakened our competitiveness.
“Now we are taking a big and important step in the right direction. With clear and simple rules, companies can focus on their core business, so we achieve better value for money in the green transition, create European jobs and strengthen companies’ ability to grow and invest.”
“This is an important step towards our common goal to create a more favourable business environment to help our companies grow and innovate,” claims Marie Bjerre, minister for European Affairs of Denmark.
This development comes after CEOs of the European Container Glass Federation (FEVE) called upon the Commission to introduce a technical adjustment to the Packaging and Packaging Waste Regulation’s minimization requirements through legal tools like the Environmental Omnibus.
The Commission’s Omnibus VI package has also postponed rules on the labelling and packaging of chemicals to January 2028, a move hoped to give businesses more time and legal certainty when implementing changes.
Earlier this year, the Commission stated its intent to simplify the EU Deforestation Regulation – publishing new guidance documents and aiming to reduce administrative burden and costs by 30%. Nestlé, Mars Wrigley, Ferrero, and Tony’s Chocolonely have since signed an open letter urging the Commission not to postpone the Regulation again, fearing that a second delay will have environmental consequences.
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