In recent years, the European Union has rolled out one of the most ambitious sustainability regulatory frameworks in the world.

Directives such as the CSRD, the CSDDD and the CBAM have placed companies at the heart of the ecological and social transition, assigning them a key role in emissions reduction, transparency and due diligence throughout the value chain. This regulatory expansion, however, has been accompanied by growing criticism from Member States and the business sector, which have warned about the complexity of the resulting framework, the overlap of obligations and its impact on European industrial competitiveness.

Sustainability cannot be built solely on increasingly complex regulatory frameworks, but rather on clear, coherent and applicable regulations.

It is in this context that the Omnibus Package has emerged: an initiative by the European Commission designed to review and adjust this regulatory framework without dismantling it. Far from constituting a single piece of legislation, the Omnibus acts as a cross-cutting amending instrument, introducing coordinated changes to several key components of the European ESG framework with the aim of aligning regulatory requirements with companies’ actual capacity to comply and with their potential impact.

Presented in February 2025, the Omnibus Package has progressed over the past year through an intense process of institutional negotiation. The positions of the Council and the European Parliament have gradually converged, leading to political agreements that significantly reshape both the scope and the intensity of corporate sustainability obligations in the European Union, particularly through amendments to the CSRD and the CSDDD.

CSRD: fewer companies in scope, greater focus on large organisations

The Corporate Sustainability Reporting Directive (CSRD), which replaces and expands the former Non-Financial Reporting Directive, was originally designed to extend sustainability reporting to tens of thousands of European companies. The Omnibus Package introduces one of its most significant changes here by redefining the applicability thresholds, with the aim of concentrating the most complex obligations on organisations with the greatest potential impact and the greatest capacity to generate comparable and verifiable information.

As a result, the obligation to report under the CSRD is now limited to companies with more than 1,000 employees and annual turnover exceeding €450 million. In the case of third-country companies, the directive applies where turnover generated within the European Union also exceeds this threshold.

The Omnibus Package represents a step in the right direction, opening the door to a more functional regulatory framework focused on the effective reduction of unnecessary burdens.

The Omnibus also introduces technical adjustments to the practical application of the CSRD, particularly with regard to the level of reporting detail and information from the value chain. The European Sustainability Reporting Standards (ESRS) remain the technical framework, but their application is more precisely defined, allowing data collection to be limited to those parts of the value chain where there is genuine influence or where clear material risks have been identified.
This approach has direct implications for the protection of small and medium-sized enterprises, which under the original design of the CSRD could have been subject to disproportionate obligations as suppliers to large companies. By linking information requests to materiality and actual influence, the Omnibus reduces the cascading effect and limits the systematic transfer of regulatory burdens to SMEs. It also explicitly recognises the possibility of using estimates, sectoral data or aggregated information where reliable primary data cannot be obtained, provided that this choice is duly justified.

At the same time, the Omnibus Package strengthens coherence between the CSRD and the EU Taxonomy, clarifying that the obligation to report under the CSRD does not automatically entail reporting with the same level of detail on taxonomy alignment. The scope of Taxonomy-related reporting must be aligned with the financial materiality of the company’s activities and their effective fit with the defined technical criteria.
Within this framework, the principle of double materiality remains a structural pillar of reporting, but its practical role as a prioritisation tool is reinforced. This allows companies to document why certain indicators or disclosures are considered relevant and others are not, avoiding a uniform approach that would require reporting information of limited significance from an impact or financial risk perspective.

CSDDD: more limited and gradual due diligence

The Corporate Sustainability Due Diligence Directive (CSDDD) has been one of the most controversial elements of the European ESG framework, both in terms of its scope and its legal implications. The Omnibus Package introduces substantial changes here, starting with a very restrictive redefinition of its personal scope of application compared with the directive’s original design, which covered companies with at least 1,000 employees and €450 million in turnover. The new framework limits its application to companies with more than 5,000 employees and global turnover exceeding €1.5 billion.

The Omnibus acts as a cross-cutting amending instrument, introducing coordinated changes to several key components of the European ESG framework.

Alongside this adjustment, the Omnibus redefines the material scope of due diligence, limiting enhanced obligations to established business relationships and to areas where adverse risks have been identified and are reasonably foreseeable. This enables companies to prioritise actions and focus resources, rather than deploying uniform controls across the entire value chain.

The Omnibus also removes the explicit obligation to adopt binding climate transition plans as part of CSDDD compliance and thoroughly revises the civil liability regime, limiting automatic exposure to claims and linking liability to the reasonableness of the measures adopted. The sanctions regime is also adjusted, setting caps at around 3% of global turnover and reinforcing the principle of proportionality.

From an institutional perspective, these changes are justified as a means of ensuring the directive’s legal, operational and economic viability. However, they have attracted criticism from social and environmental organisations, which argue that the reduction in scope and obligations may weaken its transformative potential.

Taxonomy and CBAM: continuity with technical adjustments

Although the main focus of the Omnibus Package has been on the CSRD and the CSDDD, the initiative also introduces relevant adjustments to other key instruments of the European sustainability framework, particularly the EU Taxonomy and the Carbon Border Adjustment Mechanism (CBAM), with the aim of improving internal coherence and reducing unnecessary administrative burdens.

In the case of the EU Taxonomy, the Omnibus does not alter the technical criteria for classifying sustainable economic activities, but it does more precisely redefine the scope and intensity of the associated reporting obligations. The new approach clarifies that not all companies required to report under the CSRD must do so with the same level of detail in relation to the Taxonomy.

In practice, a more selective and proportionate application of taxonomy reporting is introduced, linking the level of information required to the financial materiality of activities and their effective alignment with the defined technical criteria. This translates into greater flexibility when reporting key indicators (such as aligned CAPEX or OPEX) where the company’s activity cannot be clearly classified as eligible or aligned, or where such information is not financially material. The aim is to avoid duplication with the CSRD and reduce the production of complex information with limited analytical value.

The European Sustainability Reporting Standards (ESRS) remain the technical framework, but their application is more precisely defined.

As for the CBAM, its basic architecture is maintained as an instrument designed to prevent carbon leakage and ensure more balanced competitive conditions between European and non-EU producers. However, the Omnibus Package introduces technical and operational adjustments intended to facilitate its implementation, particularly with regard to administrative requirements for importers, the collection of data on embedded emissions and coordination with other EU climate instruments. These adjustments seek to improve the mechanism’s practical applicability without altering its core objective or environmental rationale.

Simplification or rollback?

The debate surrounding the Omnibus Package has often been framed in terms of simplification versus ambition. However, a technical reading of the set of amendments points to a different issue: the actual effectiveness of the regulatory framework. After several years of very intense regulatory expansion, the Omnibus responds to the need to correct dysfunctions identified in the practical application of certain obligations, particularly those that have generated duplication, high administrative burdens or limited results in terms of environmental and social impact.

From this perspective, the adjustments introduced do not necessarily imply abandoning the objectives of the European Green Deal, but rather an attempt to redirect regulatory efforts towards areas where they can generate a genuine transformative effect, avoiding a situation in which excessive complexity ultimately dilutes effectiveness or diverts resources towards purely formal compliance. The challenge will be to ensure that simplification does not lead to the creation of new instruments that are equally complex or impractical, reproducing under different formats the very problems now being addressed. Even so, the Omnibus Package represents a step in the right direction, opening the door to a more functional regulatory framework focused on the effective reduction of unnecessary burdens.

The Omnibus Package has progressed over the past year through an intense process of institutional negotiation.

From the perspective of Genesal Energy, this approach is particularly relevant for the European industrial fabric. Sustainability cannot be built solely on increasingly complex regulatory frameworks, but rather on clear, coherent and applicable regulations that allow companies to concentrate resources on the real improvement of their processes, products and value chains. When administrative burdens exceed operational capacity, there is a risk that sustainability becomes a purely documentary exercise, disconnected from the industrial transformation it is meant to drive.

Ultimately, the success of the Omnibus Package will not be measured solely by the number of obligations adjusted, but by its ability to strengthen the competitiveness of European industry while keeping long-term sustainability objectives firmly in sight. It is within this balance between ambition and applicability that much of the future of the European regulatory model — and its capacity to effectively support the transition towards a more sustainable economy — will be determined.