he European Commission is set to propose a series of regulatory rollbacks aimed at reducing administrative burdens for businesses, with the goal of improving competitiveness in the face of growing challenges from China and the United States.
One of the key proposals, known as the “Simplification Omnibus,” will focus on loosening corporate sustainability reporting and supply chain transparency rules. European businesses have long argued that extensive bureaucratic requirements hinder their ability to compete globally.
The Commission aims to reduce reporting obligations by 25% in the first phase, a move expected to save businesses €40 billion ($42 billion).
“In many parts of the world, we can do our job. In Europe, we spend more and more time filling in useless paperwork,” said Markus Beyrer, Director General of BusinessEurope.
Under the draft proposals, only companies with more than 1,000 employees and annual revenues exceeding €450 million would be required to comply with corporate sustainability reporting (CSRD) rules. This would reduce the number of affected businesses from 50,000 to fewer than 7,000, according to consultancy firm D. A. Carlin and Company.
The EU is also expected to amend its supply chain due diligence law (CSDDD), limiting compliance requirements to direct suppliers rather than the entire supply chain.
The Clean Industrial Deal, another major initiative, seeks to support energy-intensive industries by reducing costs, streamlining regulations, and increasing investment in clean technology. The plan aligns with the EU’s broader green agenda while balancing economic concerns.
The accompanying energy plan will focus on lowering energy costs by:
- Accelerating permits for renewable energy projects
- Adjusting energy tariffs
- Boosting subsidies for green technology
EU officials estimate that these energy measures could lead to €45 billion in savings by 2025 and €130 billion annually by 2030 by reducing fossil fuel imports.
While business leaders have welcomed the regulatory relief, critics argue that rolling back environmental, social, and governance (ESG) rules could slow the transition to a greener economy.
“They do not simply lower the level of ambition, they eliminate it,” Socialist EU lawmakers wrote in a letter to Commission President Ursula von der Leyen.
Despite concerns, the Commission insists that the changes will not compromise the EU’s net-zero climate targets. Instead, it aims to simplify regulations while maintaining environmental integrity.
For these proposals to take effect, they must be approved by the European Parliament and a majority of the 27 EU member states. Given the differing views among lawmakers, further modifications may occur before final adoption.
Reuters, Politico and Deutsche Welle contributed to this report.
