Unpacking the EU Omnibus Proposal: Your Questions Answered

In this article, we address the most pressing inquiries from the webinar around timelines, thresholds, overlapping regulations, and more. Our answers are based on the latest available information, which may change as the legislative process evolves.

Please note: The information provided does not constitute legal advice. If you have legal questions or concerns, please seek legal counsel.

1. Omnibus – Basics

Q1: When are the European Parliament and the Council expected to approve the Omnibus package?
Efforts are underway to fast-track negotiations on at least some of the amendments. For example, the European Parliament and the Council aim to accelerate decision-making on the proposed CSRD and CSDDD timeline changes. Ideally, this could still happen in 2025. The other proposals are more controversial, and negotiations will be complex. It is therefore difficult to make valid predictions.

Q2: Are you expecting the Omnibus to enable more automated reporting that saves time and money?
Time savings and streamlined data collection and reporting are stated goals of the Omnibus. It aims to reduce less relevant ESRS data points, prioritize quantitative over qualitative data, and establish a clearer distinction between mandatory and voluntary disclosures. Additionally, the requirements for climate transition plans would be aligned between the CSRD and the CSDDD. Digital reporting solutions can play a crucial role in automating processes and facilitating synergies between different regulatory frameworks.
Overall, the European Commission seeks to achieve greater harmonization between the various regulations to ease the burden on companies.  

Q3: Why isn’t the EUDR part of the Omnibus 1 proposal? Will it be added later?
The EUDR timeline was only recently adjusted. It is unclear whether any future Omnibus package intends to address the EUDR again.

2. Omnibus and the CSRD

Q1: Originally, the CSRD applied if thresholds were met for two out of three criteria. Is this still the case?
According to the Omnibus proposal, the CSRD would apply to large enterprises with more than 1,000 employees. In addition, they must exceed at least one of the following thresholds: annual turnover of €50 million or balance sheet total of €25 million.

Q2: Does the 1,000-employee threshold apply only to EU employees or is it global (including non-EU subsidiaries)?
Under the EU Accounting Directive, the consolidated sustainability statement must include all subsidiary undertakings, regardless of where their registered offices are located. Therefore, if your company exceeds 1,000 employees worldwide and meets the financial thresholds, it may fall within the scope of the CSRD.

Q3: What happens if local legislation has not yet transposed the CSRD into national law? Must we still comply?
EU member states must transpose European directives, including the CSRD, into national law for them to become legally binding. In the absence of a national law, the Non-Financial Reporting Directive (NFRD) continues to apply (threshold 500 employees), and the first batch of companies have to publish their first report in 2025, covering fiscal year 2024.

A tracker has been made available by the EU to monitor national transposition measures. Countries such as Germany and Spain have yet to transpose the CSRD into national law.

Q4: Should we pause all CSRD actions until the Omnibus proposal has been approved?
No, this is not recommended. It is presently unclear how long the process will take and what the actual outcome will be. In addition, many EU member states have already transposed the CSRD into national law, making compliance mandatory in accordance with the stipulated timeline and guiding companies’ efforts while the Omnibus proposals are being negotiated.

It is generally recommended to continue your CSRD readiness and implementation efforts. Setting up the required data collection processes, conducting the double materiality analysis, engaging all relevant internal and external stakeholders, and ensuring integrated data management takes time. Getting ready early and acting proactively ensures a smoother transition.

3. Omnibus, CSDDD and Due Diligence

Q1: I heard that if an undertaking is subject to both the CSRD and CSDDD, there’s no need to provide additional information for the CSDDD. Is that correct?

CSDDD reporting obligations can be fulfilled by meeting corresponding CSRD reporting requirements. A key example is the requirement to develop a transition plan in line with the goals of the Paris Agreement, as mandated by both directives.

Q2: Does the CSDDD require mapping tier-n suppliers?
Based on the rules currently in force, companies have to conduct full due diligence on their entire upstream supply chains, for their own operations, and for downstream activities such as distribution, transport, and storage. The CSDDD pursues a risk-based approach. This means that companies should manage the most severe and likely impacts across the supply chain, essentially requiring tier-n transparency.

The Omnibus proposal shifts the main focus to direct suppliers, with lower-tier suppliers requiring in-depth assessments when there is plausible information suggesting that adverse impacts have occurred or may occur. This calls for capabilities to also screen the supply chain beyond direct business partners.

Q3: For the CSDDD, do companies only need to conduct a risk assessment every five years?
No, the Omnibus proposal states that the adequacy and effectiveness of due diligence measures should only be reviewed once every five years instead of annually. However, in the event of significant changes or if measures prove inadequate or ineffective, ad-hoc reviews must be conducted, regardless of the five-year cycle.

We still recommend that companies monitor the adequacy and effectiveness of their due diligence measures on a regular basis to streamline processes and mitigate reputational risks.

Q4: Is the German Supply Chain Due Diligence Act (LkSG) still in force, and how do the new Omnibus rules affect it?
Yes, the LkSG is still in force and the law will need to be adjusted to meet the requirements of the CSDDD.

The Omnibus proposal aims for maximum harmonization across the EU, meaning that certain articles of the CSDDD would be the same in all member states, particularly the due diligence obligations. National legislators will have some leeway to implement different rules with respect to other aspects of the CSDDD, such as sanctions, civil liability provisions, and the scope of affected companies.

4. Omnibus and CBAM

Q1: For CBAM, does the 50-ton threshold apply per tariff number or for total imports?
According to the current Omnibus proposal, the 50-ton exemption applies to the total imported mass of all CBAM-covered goods per importer and not per tariff number. For example, if a company imports 5 tons of aluminum and 45 tons of steel, both product categories would have to fulfill CBAM obligations.

Q2: Are we expecting changes to TARIC codes for CBAM next year?
Yes, the European Commission may update TARIC codes when extending CBAM’s product scope. It’s wise to track Commission updates to see if new product classifications will be added.

Q3: From January 1, 2026, until August 30, 2027, do we have to submit CBAM reports?
Despite the proposed reporting timeline changes, importers would still need to report emissions for 2026, but not on a quarterly basis. The Omnibus proposes to shift the deadline for the annual CBAM report from May 31 to August 31, 2027. Final rules are subject to change under the Omnibus package.

Q4: Does the Omnibus change how CBAM certificates are priced?
The Omnibus proposal introduces changes to the timeline for purchasing CBAM certificates, but it does not alter the pricing mechanism of these certificates. CBAM certificates will continue to be priced based on the weekly average auction price of EU Emissions Trading System (ETS) allowances, expressed in euros per ton of CO₂ emitted.

Q5: What if suppliers can’t provide CBAM data, particularly for precursors?
The CBAM Omnibus proposal introduces key simplifications to address cases where suppliers cannot provide CBAM data, especially for precursors (raw materials used to produce CBAM goods):

• Importers can automatically use default values without needing to prove why supplier data is missing.
• Precursors made in the EU are excluded from CBAM reporting obligations because they are already covered under the EU ETS.

However, over-reliance on default values may lead to higher costs, as these values are often higher than actual emissions to incentivize importers to collect real emissions data.

Q6: Any information on registration as an authorized CBAM declarant?
The CBAM Omnibus proposal introduces simplifications to the registration process for becoming an Authorized CBAM Declarant.

In the past, when an importer applied for CBAM Declarant status, the National Competent Authority (NCA) had to consult with other NCAs and the European Commission. Under the new proposal, this consultation step would become optional instead of mandatory and the NCA would be able to decide whether a consultation is needed or not.

Detailed processes are outlined by customs authorities in each EU Member State, but the Commission is also expected to publish further guidance.

5. What Companies Should Do Now

Companies should note that changes proposed as part of the Omnibus initiative will only take effect if the EU institutions reach an agreement. In addition, it remains unclear how long the negotiations will take. Still, the core obligations of the CSRD, CSDDD, CBAM and the EU Taxonomy will remain in place.

We therefore recommend that companies act with foresight, future-proofing their internal processes, governance structures, data management, and compliance strategies.

Key steps companies should take:

• Stay informed: Closely monitor legislative developments, we will also provide regular updates.
• Assess impacts: Map how the proposed changes affect your operations and corporate strategy, keeping in mind EU- and non-EU entities. Identify overlaps to avoid duplication and leverage synergies.
• Maintain momentum: Uphold your compliance efforts and don’t wait for Omnibus finalization.
• Stakeholder engagement: Continue to engage in dialogue with your stakeholders and suppliers so you can respond quickly and make sure everyone pulls in the same direction once any changes have been decided.

Further resources:

• Blog article: Omnibus Initiative – What are the Implications for Businesses?
• Webinar: Omnibus Package – What Companies Need to Know (Part 1)
• White Paper: CSDDD & Omnibus – Navigating Compliance in a Changing Landscape

To find out how we can help you stay ahead of the curve, schedule a demo with one of our experts.