The European Commission (EC) proposed to simplify sustainability rules for businesses, on Wednesday, arguing that complex regulations and “red tape” are preventing EU businesses from maintaining competitiveness and hindering economic investment. The primary proposal is to delay the application of the new Corporate Sustainability Reporting Directive (CSRD) law for applicable companies, as well as other sustainability laws that form part of the European Green Deal.
The EC’s proposal forms part of this cross-cutting. The proposal was made by Commissioner Maria Luis Albuquerque and Commissioner Valdis Dombrovskis at the European Economic and Social Committee (EESC) plenary debate. At the debate, Dombrovskis said:
While our commitment to securing the green transition has not wavered, we must acknowledge that this has come at a cost, generating a large regulatory burden on people and businesses. As we take stock, we se that this accumulation of rules, and their increased complexity, are limiting our economic potential and our prosperity.
Dombrovskis proposed to “free” 80 percent of companies “under the scope of the CSRD,” delay the application of the corporate sustainability due diligence, lift the mandate “to adopt sectoral-specific standards,” amend rules within the EU taxonomy on sustainable investments, and to instate “unprecedented simplification changes to the Carbon border Adjustment Mechanism.”
The European Climate Law, better known as the EU Green Deal Plan was endorsed by EU Parliament in 2021. It set out a comprehensive plan to help the EU achieve climate neutrality by 2050. In January 2025, the EC announced its “Competitive Compass” framework, aiming to balance sustainability with competitiveness through a focus on three pillars: innovation, decarbonization, and security. The EU said that “cross-cutting” actions would be used to achieve this, including the “simplification of regulatory and administrative burdens on firms.”
Organizations, such as BusinessEurope and the EU Employers Group, have welcomed the Competitive Compass, praising the initiative for its focus on innovation and reducing regulatory burdens. Other parties, such as the president of the EU Socialists and Democrats, Iratxe García, have criticized the initiative for failing to properly address problems and undermining the Green Deal
Agence France-Presse
February 26, 2025
The EU believes that with the U.S. 'moving away' from the green agenda under U.S. President Donald Trump, the bloc should 'step forward' (PATRICK HERTZOG/AFP)
by Raziye Akkoc and Camille Camdessus
The EU is expected to roll back a slew of environmental rules on Wednesday as it charges ahead with a deregulation drive in a bid to keep up with the United States and China.
The European Union's focus has pivoted to competitivity amid concerns over sluggish economic growth -- in a significant move away from EU chief Ursula von der Leyen's first mandate that focused on tackling climate change.
The issue has taken on acute urgency with US President Donald Trump pushing an America First strategy that risks a trade war with the EU.
Exasperated companies -- as well as key powers France and Germany -- are urging Brussels to make it easier to do business and bring down energy costs, which are higher than in the United States.
With their concerns in mind, the European Commission will unveil a package of proposals that leaked draft documents, seen by AFP, indicate will include watering down green standards as well as measures to cut energy costs and strengthen the clean tech sector.
They will need approval from EU states and the European Parliament.
At stake are new rules on environmental and human rights supply chain standards -- adopted with fanfare barely months ago but now attacked as too burdensome for businesses.
"The reality is there is an increasingly tense geopolitical context and we cannot ask our companies to invest massively in reporting resources when they should be in a war economy and are in the midst of decarbonizing," EU industry chief Stephane Sejourne said.
- Clipping green rules -
Two major texts are in the EU's firing line: the Corporate Sustainability Reporting Directive (CSRD), which requires large firms to give investors and other "stakeholders" information on their climate impacts and emissions, and steps taken to limit them.
The other is the Corporate Sustainability Due Diligence Directive (CSDDD) -- passed last year -- which demands large companies fix the "adverse human rights and environmental impacts" of their supply chains worldwide.
In a draft document, the EU says companies must report on supply chains every five years rather than annually, which will "significantly reduce burdens".
It added the commission would make larger companies -- with more than 1,000 employees -- comply.
Today, the rules apply to firms with over 250 employees and a 40-million-euro ($42-million) turnover.
- Past 'mistakes' -
The changes will likely be hotly debated in the EU parliament, with centrists, left-wing and green lawmakers opposed to weakening environmental rules -- although some liberals said they accepted changes.
French centrist Marie-Pierre Vedrenne now considers the rules to have been a "mistake", despite previously voting for them.
"The world is completely changing," she said. "I think we need to say at the European Parliament 'OK, sometimes we make mistakes'".
The parliament's socialist grouping, however, urged Brussels to "revisit" its approach in a letter last week.
Climate groups oppose paring back the rules.
"Changing the course now would be very detrimental to leading companies who are committed to sustainability and started investing money and resources in complying with legislation," Amandine Van Den Berghe of environmental law NGO ClientEarth said.
"If the race is a race to the bottom, we won't win," she said.
- 'Step forward' Europe -
Brussels insists it remains committed to its environmental goals, and to become climate-neutral by 2050.
In sync with the move to cut red tape, the EU will Wednesday present its "Clean Industrial Deal" -- a mix of measures for a stronger green tech sector -- as well as steps to lower energy prices.
With Trump rejecting his predecessor's push to bolster clean tech investment, Brussels believes there is an opportunity for Europe.
"The fact that the U.S. is now moving away from the green agenda... does not mean that we would do the same. The opposite. It means that we need to step forward," said EU energy commissioner Dan Jorgensen.
Representatives for the business sector in Brussels, however, privately expressed concern that concrete measures to reduce energy costs could come too late.
For example, they pointed to a leaked document which says Brussels will reform state aid rules by July and a legal proposal to cut waiting times for renewable energy projects' permits that will be introduced by the end of 2025.
© Agence France-Presse
The funding is part of the Clean Industrial Deal.
The funding is part of the EU executive's master plan to help traditional industries cut carbon emissions. | Nikolay Doychinov/AFP via Getty Images
February 26, 2025
By Zia Weise
BRUSSELS — The European Commission today announced €100 billion in short-term relief to supercharge climate-friendly manufacturing in the EU.
The funding is part of the EU executive's Clean Industrial Deal, its master plan to help traditional industries cut carbon emissions and boost the EU's emerging clean-technology sector amid fierce competition from China and the United States.
The Commission faces financing constraints as the bloc is only just starting to negotiate its new long-term budget. But it promises to "mobilize over €100 billion" for "EU-made clean manufacturing" in the short term.
The funding effort announced Wednesday centers on an "Industrial Decarbonization Bank" and is scraped together from several places. The initiative will pull funds from the EU's existing Innovation Fund and a revision of the InvestEU program. It will also source revenue from the bloc's carbon market, according to the Commission's proposal.
The Clean Industrial Deal also encompasses measures to boost investment, lower energy prices and increase demand for clean manufacturing.
Other initiatives include new made-in-EU criteria for climate-friendly materials bought by governments and other public authorities, joint purchasing of critical raw materials, and voluntary carbon labeling for industrial products.
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