EU bureaucracy reduction: less burden, more green progress

The European Commission has presented a package of three proposals: a so-called omnibus law to reduce bureaucracy, a plan to promote green technologies and energy-intensive companies, and an action plan for affordable energy. They are intended to relieve industry not only of bureaucracy, but also of high energy prices. The Commission also wants to support it through targeted promotion of European products, for example through "Buy European" requirements and state aid.

The "Omnibus" is intended to bring four existing laws under one roof and at the same time streamline them - especially for the benefit of small and medium-sized businesses. It concerns the Corporate Sustainability Reporting Directive (CSRD), the Taxonomy Regulation defining sustainability, the audit obligations of companies in their supply chain set out in the EU Supply Chain Directive (CSDDD) and the _Carbon Border Adjustment Mechanism (CBAM).

Around 80 percent of the companies affected so far, specifically those with fewer than 1,000 employees, will no longer have to report on the impact of their activities on the environment and climate. The CSRD regulations will not change for larger companies. The Commission wants to focus on those companies whose activities have the greatest impact on sustainability. However, those companies that remain required to report will be given more time to do so, namely until 2028.

The Commission itself stated that it originally wanted to do something good for the economy: the taxonomy was intended to provide the economy in general and the financial sector in particular with a benchmark for determining which economic activities and which companies should be classified as sustainable. The relevant proof requirements are now to be significantly reduced, as was the case with the CSRD. They no longer apply to companies with fewer than 1,000 employees, but can still be used voluntarily.

A lot is set to change here. Essentially, companies will have to check much less closely whether partner companies in their supply chain meet the environmental, social and human rights standards set by the EU . This check will no longer be limited to the entire supply chain, but only to the next company. In addition, this check will no longer be carried out annually, but only every five years, apart from ad hoc checks where necessary. Small and medium-sized companies will also generally have to collect less data about their business partners. Liability for violations of the regulations will be simplified. Finally, the obligations of large companies will take effect a year later than planned, in July 2028.

The Commission wants to relieve small importers of the bureaucratic burden that arises from the provisions of the EU climate tariff CBAM. In future, this will only apply if the total _CO2 emissions of imported goods exceed 50 tonnes. This would exempt 90 percent of importers from the CBAM obligations, while 99 percent of emissions would still be covered by the climate tariff, the Commission calculates.

The Commission estimates that if its proposals are implemented as proposed, they will save companies €6.3 billion and will also mobilise additional public and private investment.

Certainly not. They will now be forwarded to the Member States and the European Parliament for consultation. Given the criticism voiced on Wednesday, especially by the Greens and Social Democrats, it is very likely that they will be significantly changed there.

The Clean Industrial Deal focuses on two things: the promotion of energy-intensive industries - such as steel, automotive and chemicals - and the further development of green technologies. It includes proposals for the conclusion of new trade agreements, the supply and recycling of critical raw materials, the reduction of energy costs and the targeted promotion of demand for European green products.

The Commission wants to boost demand by giving preference to local production over imports from third countries. For example, it wants to enable member states to give preference to European suppliers by reforming the rules on public procurement. In addition to price, they should be able to use criteria such as sustainability or the independence of the EU (resilience). It also wants to encourage companies to use green European intermediate products, such as green steel or cement, through new labels on _CO2 intensity over the entire life cycle. This should then also be taken into account in state funding for leasing contracts, for example. The share of European green products in consumption should thus increase to 40 percent. In order to promote the conversion of energy-intensive companies such as steel, cement or chemicals to climate-neutral production, the Commission also wants to speed up the approval procedures for these. This is to be part of the "Industrial Decarbonisation Accelerator Act", which the Commission plans to present later.

The European Commission's approach has not changed in principle: it wants to reduce energy costs, which are high compared to China and the USA, by expanding "clean energy". This also includes nuclear power. The proposals are technology-neutral in this respect. The share of electricity in energy consumption is to rise from 21.3 percent today to 32 percent in 2030. In the short term, state support for long-term purchase agreements between companies and electricity producers is intended to bring more stable and lower prices for industry. The Commission wants to set up a support program for this together with the European Investment Bank (EIB). The amount is still uncertain.

On the one hand, the Commission wants to allow more state aid. On the other hand, it is calling on states to reduce electricity taxes and network charges. The Commission also wants to encourage states to buy more gas together. This should strengthen the market power of the participating companies and prevent them from outbidding each other when purchasing and thus driving up prices.

The Commission estimates the additional annual investment required for the green transformation in energy, industry and transport at 480 billion euros compared to the last decade. The money is to come from the member states and from the private sector. It itself wants to mobilize 100 billion euros to promote green production in the EU. The money is not to come entirely from the EU. Instead, the Commission wants to attract private investors with significantly smaller sums from the EU budget and revenues from emissions trading.

The Commission wants to improve access to raw material deposits in third countries through trade agreements and so-called "partnerships for clean trade and investment". It also wants to expand the recycling of critical raw materials. Their share is to increase from 11.8 percent today to 24 percent by 2030. To this end, the Commission wants to present a circular economy law by the end of 2026. This is intended to restrict the export of waste containing such critical raw materials to third countries.

The Commission stresses that it is unwaveringly committed to the climate targets and the Green Deal. Contrary to what the Greens and climate activists had hoped, it has not presented a new EU climate law in parallel with the relief package for industry in order to set a new reduction target for 2040. However, the target of a 90 percent reduction is mentioned.