HAVET & VANHUFFEL – Association d’avocats
On February 26, 2025, the European Commission adopted a new set of proposals aimed at simplifying EU rules, boosting competitiveness and freeing up additional investment capacity.
Environnementally, these proposals cover in-depth simplification in the areas of sustainable finance reporting, sustainability due diligence, the EU taxonomy and the Carbon Border Adjustment Mechanism and European investment programmes.
The main changes in the area of sustainability reporting (CSRD and EU taxonomy) will:
- remove around 80% of companies from the scope of the CSRD;
- ensure that sustainability reporting obligations imposed on large companies do not place a burden on smaller companies in their value chains;
- postpone by two years (to 2028) the information obligations for companies which currently fall within the scope of the CSRD and which are required to publish information from 2026 or 2027;
- reduce the burden of obligations to publish information in relation to the EU taxonomy and limit these obligations to the largest companies (corresponding to the scope of the Corporate Sustainability Due Diligence Directive), whilst retaining the possibility for other large companies which fall within the future scope of the CSRD to publish information on a voluntary basis;
- introduce the possibility of publishing information on activities that are partially aligned with the EU taxonomy, which will promote a gradual environmental transition of activities over time, in line with the objective of increasing transition financing to help businesses move towards sustainability;
- introduce a financial significance threshold for publishing taxonomy-related information and reduce the models to be used to publish this information by around 70%;
- simplifying the most complex criteria of the ‘do no significant harm’ principle relating to the prevention and control of pollution linked to the use and presence of chemicals which apply horizontally to all economic sectors under the EU taxonomy, as a first step in revising and simplifying the set of criteria of this principle;
- adapt, among others, the main taxonomy-based key performance indicator for banks, namely the green asset ratio (GAR). Banks will be able to exclude from the denominator of the GAR exposures relating to companies which do not fall within the future scope of application of the CSRD (i.e. companies with fewer than 1,000 employees and whose turnover is less than €50 million).
The main changes in the area of sustainability due diligence will be:
- simplify sustainability due diligence requirements to avoid unnecessary complexities and costs for companies falling within the scope of the Directive, for example by focusing systematic due diligence requirements on direct business partners and reducing the frequency of periodic assessments and monitoring of their partners from once a year to once every five years, with, where appropriate, ad hoc assessments;
- reduce burdens and trickle-down effects on SMEs and small mid-cap companies by limiting the amount of information that can be requested from them as part of value chain mapping by large companies;
- continue the harmonization of duty of care requirements to ensure a level playing field across the EU;
- remove EU civil liability requirements while preserving victims’ right to full compensation for damage caused by non-compliance and protecting businesses against overcompensation, under Member States’ civil liability regimes;
- give companies more time to prepare to comply with the new requirements by postponing the application of the sustainability due diligence requirements for larger companies to July 2028, while bringing forward the adoption of the guidelines to July 2026.
Simplifying the for fairer trade
The main changes to the Carbon Border Adjustment Mechanism (CBAM) for fairer traide will be as follows:
- exempt small importers, mainly SMEs and individuals, from obligations arising from the Carbon Border Adjustment Mechanism (CBAM);
- Simplify the rules applicable to companies that continue to fall within the scope of the Carbon Border Adjustment Mechanism (CBAM):
- rules regarding the authorization of Carbon Border Adjustment Mechanism (CBAM) reporters, as well as the obligations arising from the Carbon Border Adjustment Mechanism (CBAM), including the calculation of embodied emissions and reporting Carbon Border Adjustment Mechanism (CBAM) more effective in the long term, by strengthening rules to prevent circumvention and abuse. This simplification precedes a future extension of the Carbon Border Adjustment Mechanism (CBAM) to other products in the sectors covered by the ETS, namely downstream products. It will be followed by a new legislative proposal concerning the extension of the scope of the MACF at the beginning of 2026.
To consult the proposed directive, follow the link : https://commission.europa.eu/document/download/892fa84e-d027-439b-8527-72669cc42844_en?filename=COM_2025_81_EN.pdf
to consult the proposef regulation, follow the link : https://commission.europa.eu/document/download/58f5e2e3-e2c9-4149-9fd6-648490c9e7fe_en?filename=COM_2025_84_EN.pdf