Omnibus package update EU council urges speed

Minutes from the European Council's meeting on 20 March 2025 indicate that the Omnibus Package will be treated as a priority item, and in particular called on:

• confirmed the EU Council's alignment with the overall goals of the Omnibus Package of reducing the cost of administrative burdens by 25% and by 35% for SMEs, signalling that the Council will likely be supportive of the simplification measures during oncoming trialogue negotiations;
• called on co-legislators to finalise the Omnibus simplification package during 2025;
• called on co-legislators to finalise the 'stop-the clock' mechanism at the latest by June 2025.

The EU Commission had strategically split the Omnibus Package into three proposals to maximize efficiency:

• Proposal 1: covers postponement of CSRD reporting requirements ('stop-the-clock') until 2028 for wave 2 companies and until 2029 wave 3 companies and CS3D application by one year to 2028. This requires adoption by the European Parliament and Council, but expected to be uncontroversial and be approved quickly. This requires adoption by the European Parliament and Council, but expected to be uncontroversial and be approved quickly (between 2 and 6 months).
• Proposal 2: covers substantive amendments to CSRD and CS3D, including threshold increase for CSRD and EU Taxonomy, limits to trickle effect for smaller companies in value chain/chain of activities and limiting due diligence under CS3D to tier 1 business partners. This also requires adoption by the European Parliament and Council, more complex and could take at least 12 – 18 months to finalise.
• Proposal 3: covers further amendments to EU Taxonomy framework, including materiality thresholds, simplified reporting templates, Green Asset Ratio and DNSH criteria. Unlike Proposals 1 and 2, Proposal 3, which amends only Level 2 legislation, follows a separate legislative process which does not require approval from the European Parliament and Council, although they retain veto rights during the scrutiny period. It will undergo public consultation and scrutiny and could be adopted as early as end of June 2025.

(Read our more detailed briefing on the contents of the Proposals HERE)

Among other things, this allows the 'stop-the clock' proposal to be fast-tracked separately to the more complex substantive amendments. 

Current estimates is that the proposal to use a fast-track process for the 'stop-the-clock' will be put to a vote before the EU Parliament in early April, and the EU Council's most recent minutes suggest support for the accelerated timeline.

Next steps

The proposal to fast-track the stop-the-clock proposal is generally welcomed, as it will provide urgent breathing space for companies which are squeezed in the uncertainty between the looming original reporting deadline (FY25 / FY26 for 'Wave 2' and 'Wave 3' companies) and the potential major substantive changes (which aren’t expected to be confirmed until 2026).

The market continues to closely monitor the progress of the proposals through the legislative bodies and we expect the next significant developments to occur in early April.