Towards Smarter Regulation or Just the Beginning?

The European Commission’s recently unveiled Omnibus I and II packages have sparked cautious optimism across Europe’s business landscape. These legislative proposals aim to simplify complex EU regulations, especially those related to ESG reporting, sustainability compliance, and public funding access. While the move to reduce red tape is welcome, many industries stakeholders question whether the reforms go far enough.

Key changes include adjustments to ESG reporting under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). Only companies meeting at least two of the following criteria—over 1,000 employees, €50 million in turnover, or €25 million in assets—will be required to comply. The CSDDD transposition deadline is delayed to July 2027, with a single milestone for large companies (3,000+ employees and €900 million turnover) in July 2028, and the general deadline set for July 2029.

Czech industry associations support the revisions, calling them a necessary correction. Both the Confederation of Industry and the Czech Chamber of Commerce see the proposals to better align regulations with business realities—especially for SMEs. However, they continue to advocate for further flexibility, including voluntary regimes for low-risk companies.

Omnibus I also addresses the impracticalities of the Carbon Border Adjustment Mechanism (CBAM). The current €150 import threshold would be replaced by a more realistic 50-tonne annual limit, easing burdens for smaller importers. While this reflects business feedback and eases administrative burden, concerns remain over effectiveness and fairness—European exporters still face disadvantages on third markets under current emissions rules, with no solution yet proposed to level the playing field.

The revision of the “Do No Significant Harm” principle in the EU’s sustainability taxonomy has been cautiously welcomed. Businesses appreciate the shift toward more pragmatic language but warn against making taxonomy criteria a gatekeeper for funding. Calls persist to extend transitional periods—20 years for nuclear and 5 years for gas—to help industries align long-term investments with green objectives.

Meanwhile, Omnibus II targets compliance burdens in public funding. It proposes replacing auditor certifications with management declarations and harmonizing application procedures. While broadly supported, Czech business groups stress that simplification must apply equally to SMEs and large firms. Skepticism also remains around the projected €200 million in savings without more fundamental reform of EU program administration.

For Czech businesses, the packages offer a step forward—but not a breakthrough. ESG rules, taxonomy, CBAM, and funding mechanisms remain interconnected. Unless simplification is matched by coherence, businesses may still struggle through a regulatory maze—albeit one with slightly shorter corridors.

Whether Omnibus signals a lasting shift or a short-term adjustment remains uncertain. What is clear: Czech industry is ready to engage, but also to push for more.

Source: Confederation of Industry of the Czech Republic + Czech Chamber of Commerce