EU Omnibus Package and the ‘Stop-the-Clock’ Proposal: What Businesses Need to Know

The EU Omnibus Packages and the “Stop-the-Clock” proposal introduce key reforms to sustainability reporting (CSRD), supply chain due diligence (CSDDD), the EU Taxonomy Regulation, CBAM, and the InvestEU programme. Under the new framework, sustainability reporting deadlines have been postponed: large companies must report from 2027, while listed SMEs will follow from 2028. The scope of CSRD has also been narrowed to focus on companies with more than 1,000 employees.

Supply chain due diligence requirements have been simplified, with an emphasis on direct suppliers and a five-year review cycle. Meanwhile, CO₂ import taxes under CBAM will be delayed until February 2027. For UK, Irish, and third-country businesses operating in the EU, thresholds of €150 million for CSRD and €450 million for CSDDD will trigger compliance obligations.

This transitional period presents an opportunity for businesses to assess their ESG strategies, upgrade internal systems, and strengthen stakeholder communication. For a full breakdown and practical guidance, read our blog and join our webinar on 29 April.

As of April 2025 | For EHS and ESG professionals, business leaders and sustainability managers in the UK, Ireland and non-EU countries 

Introduction

The EU has reshaped the landscape of sustainability compliance with the launch of two new legislative simplification initiatives: the Omnibus Packages I and II, combined with the “Stop-the-Clock” proposal. These changes are set to redefine corporate sustainability reporting (CSRD), supply chain due diligence (CSDDD), and carbon border taxation (CBAM) obligations, while easing administrative burdens for businesses across the EU and beyond.

Although designed for EU Member States, the impact of these reforms extends well into the UK, Ireland, and other non-EU markets. British and Irish companies operating within the EU or trading with EU clients must pay close attention to the new thresholds and deadlines — or risk falling out of compliance.

To help businesses navigate these crucial updates, we invite you to explore our detailed article. And for deeper insights, do not miss our live ESG Webinar on 29 April at 4:00 PM (3:00 PM UK time), where our experts will explain what these changes mean for your reporting strategy and supply chain management.

What is the EU Omnibus Package?

On 26 February 2025, the European Commission introduced two comprehensive legislative simplification packages known as the Omnibus Packages. These aim to ease administrative burdens by revising existing EU regulations on sustainability reporting, supply chain due diligence, sustainable investment classifications, and carbon border taxation. Specifically, the packages amend the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the EU Taxonomy Regulation, the Carbon Border Adjustment Mechanism (CBAM), and the InvestEU programme. These reforms align with the Commission’s broader strategy to enhance EU competitiveness by streamlining compliance frameworks

What Are the Key Changes Introduced by the Omnibus Packages? 

The first Omnibus Package focuses on reforms to the CSRD and the CSDDD. Under the “Stop-the-Clock” mechanism, formal proposals were adopted to postpone reporting deadlines and revise the scope of applicability. These proposals were approved by the European Parliament on 3 April 2025 and by the Council of the EU on 14 April 2025 (consilium.europa.eu). 

Corporate Sustainability Reporting (CSRD) 

Reporting obligations for certain categories of companies have been postponed: 

Large public interest entities and similar partnerships will not be required to report until fiscal years beginning on or after 1 January 2027 (COM(2025) 80). Small and medium-sized listed companies (SMEs) will begin reporting from 2028. Companies already under NFRD rules must continue reporting as of 2024. 

Another proposal (COM(2025) 81) narrows the scope of CSRD: Only companies with more than 1,000 employees and either €50 million in turnover or €25 million in total assets will fall within its scope. The application to financial institutions, insurers, and non-EU (third-country) companies is also under review.

The European Sustainability Reporting Standards (ESRS) will be significantly simplified, with a reduction in mandatory data points. Industry-specific standards and the proposed listed SME standard (LSME) are being dropped. A voluntary SME standard (VSME) will be introduced instead. Companies with turnover below €450 million will no longer be required to report under Article 8 of the EU Taxonomy, though an opt-in remains available (Denkstatt.at). Sustainability reports will also be subject to limited assurance audits (esgdive.com).

Corporate Sustainability Reporting (CSRD) 

Key amendments include delaying national transposition deadlines to July 2027. Companies with over 3,000 employees and €900 million in global turnover will be covered from July 2028, while companies with 1,000 employees and €450 million turnover will follow in 2029 (COM(2025) 81). 

Due diligence will focus primarily on direct operations and Tier 1 suppliers. Indirect partners only need to be considered when credible risks are identified. Reviews will occur every five years. Mandatory termination of business relations and public fines have been removed. Civil liability provisions across the EU have also been dropped (esgdive.com). 

Carbon Border Adjustment Mechanism (CBAM) 

The requirement to purchase certificates for imported goods will begin in February 2027, with reporting required from August 2027. A 50-tonne import exemption and standard emissions values are included for companies lacking exact data. CO₂ taxes paid abroad will be recognised (COM(2025) 87). 

InvestEU Simplifications 

The second Omnibus Package targets InvestEU. SMEs receiving investment support will face fewer reporting obligations. Reinvested returns from previous projects will be used to guarantee new investments, aiming to leverage €50 billion.

What Does This Mean for the UK, Ireland and Non-EU Countries? 

Although the UK is no longer a member of the EU, British and Irish companies that operate in the EU or serve EU clients may still fall under the CSRD and CSDDD if they meet the relevant thresholds for EU turnover or have subsidiaries within EU Member States. Specifically, non-EU companies generating at least €150 million in net turnover within the EU will be subject to the CSRD’s third-country reporting requirements once implemented (source: dart.deloitte.com). 

Similarly, the CSDDD will apply to third-country companies with over €450 million in EU turnover from July 2029. This means that UK-based businesses with supply chains, operations, or sales activities in the EU must monitor these developments closely and prepare for compliance, even in the absence of national implementation. Ireland, as an EU Member State, will transpose the directives into national law, likely following EU-level timelines and thresholds. 

Non-EU businesses (including from the UK and beyond) should assess their exposure through subsidiaries, supply chains, or capital markets in the EU. Even if not directly regulated, compliance with CSRD and CSDDD may become a business necessity through customer or investor expectations. 

Strategic Recommendations for Companies 

This transitional phase offers an ideal window for companies to review their sustainability governance and reporting structures. A gap analysis can help identify where internal processes must evolve to meet future reporting and due diligence requirements. ESG and EHS professionals should establish cross-departmental collaboration and invest in systems for capturing and managing sustainability data (KPMG Law). 

Internal training is essential, particularly for procurement, compliance, and legal teams. Transparent communication with investors, regulators, and customers will also help build credibility. International companies should stay informed about how EU legislation is influencing global sustainability standards, particularly in the UK, US, and Asia (dart.deloitte.com)

Webinar Invitation – 29 April 2025 – 4pm CET (3pm GMT)

Don’t miss our upcoming live ESG webinar on 29 April at 4:00 PM (3:00 pm UK time). Our expert Roxana Bota, Head of Content DACH, will guide you through the most important changes to the CSRD, CSDDD, EU Taxonomy, and CBAM – and answer your questions live.