EU Compass and Omnibus Packages: Adjustments for more Competitiveness

On January 29, 2025, the first large-scale initiative was published at the beginning of the new EU Commission's term of office: "An EU Compass to regain competitiveness and secure sustainable prosperity" (Press release of the European Commission of 29.01.2025).

With the "Competitiveness Compass", the Commission has presented a comprehensive strategy to strengthen Europe as a location for innovation, combine decarbonization with competitiveness and strengthen Europe's security and resilience.

The Simplification Omnibus packages are part of the horizontal factors to strengthen competition. They aim to simplify sustainability reporting standards and include key regulations such as the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy. The aim is to reduce regulatory complexity and increase Europe's competitiveness.

We have compiled all known details on the omnibus packages and their impact on companies in this blog.

What are the Omnibus Packages?

The Omnibus Packages are part of the flagship initiative "Five Horizontal Factors for Competitiveness", which together with three main pillars make up the newly published "EU Competitiveness Compass". The EU Compass aims to simplify sustainability requirements and thereby promote innovation, decarbonization, and security.

The EU Commission will draw up several omnibus packages that will drive forward various simplifications. None have been adopted yet. The first omnibus simplification package, the "Sustainability Omnibus Package", will be presented on February 26. It is currently still unclear which sectors will be affected by further omnibus packages, and whether additional sustainability requirements will be added.

Other packages currently planned, according to EU Compass, page 24 - 25 (with year):

• European Business Wallet (2025)
• Single Market Strategy (Q2 2025)
• Revision of the Standardisation Regulation (2026)
• Savings and Investments Union (Q1 2025)
• Next MFF, including Competitiveness Fund and a Competitiveness Coordination Tool (2025)
• Union of Skills (Q1 2025)
• Quality jobs roadmap (Q4 2025)
• Skills Portability Initiative (2026)

Important goals of the omnibus simplifications are:

• Proportional timetables: Companies are to be gradually introduced to the requirements to ensure smooth implementation.
• Reduced reporting requirements: A 25% reduction in reporting requirements is planned (35% for SMEs)
• New category for small mid-caps: About 31,000 companies in the EU could benefit from tailor-made regulations.
• Focus on relevant metrics: Focus on investor-relevant data and the most damaging economic activities.

Significant Impact of the Omnibus Simplifications on Companies

The omnibus packages will have a significant impact on businesses by facilitating compliance and reducing regulatory burdens, particularly for small and medium-sized enterprises (SMEs). For example, the omnibus packages — the first of which, the “Sustainability Omnibus” — will reduce reporting obligations. The adaptation of obligations to company sizes and areas of activity is taken into account.

One focus is on sustainable financial reporting, due diligence and taxonomy. SMEs will also benefit from protection against excessive requirements along the supply chain. A new definition of SMEs is also planned, which will mean that some companies will no longer fall within the scope of the CSRD.

In addition to the specific omnibus packages, companies also benefit in principle from the individual initiatives through the EU Compass. The aim is for green technologies and the circular economy to lead to clear competitive advantages, reduce strategic dependencies and ensure stable supply chains. All of this should make European companies more resilient to global uncertainties.

What does the Competitiveness Compass contain?

The EU Competitiveness Compass comprises three priority areas for action to improve competitiveness and five horizontal factors that are necessary to promote competitiveness in all areas.

Key areas of action of the Competitiveness Compass

In order to increase the competitiveness of European companies, the EU Commission envisages three pillars:

1. Innovation and digitalization

The EU Commission is pursuing the goal of creating an environment that supports young, innovative start-ups. It also wants to expand industrial leadership in high-growth sectors based on deep tech and promote the dissemination of new technologies in established companies and small and medium-sized enterprises (SMEs).

2. Decarbonization and circular economy

This pillar combines decarbonization with industrial, competition, economic and trade policies to promote growth. The Compass emphasizes the challenge of high energy prices and defines measures to facilitate access to clean, affordable energy. The “Deal for a Clean Industry” pursues a competitive decarbonization approach that strengthens the EU as an attractive manufacturing location and supports the promotion of clean technologies and circular business models.

3. Security and dependence

Security aspects and strategic autonomy should be more strongly integrated into the EU's economic policy. The EU's ability to reduce dependencies and diversify its supply chains will be strengthened through effective partnerships. The Compass outlines new partnerships for clean trade and investment to increase the security and competitiveness of EU businesses.

Horizontal factors to strengthen competitiveness

The three priorities for action are supplemented by five horizontal factors that include concrete measures for implementation:

1. Simplification: The omnibus packages aim to make procedures for sustainability reporting, due diligence and the EU taxonomy simpler and faster.
2. Removing barriers to the single market: barriers within the EU should be removed and new barriers avoided. This includes the modernization of economic governance and the acceleration and simplification of standardization procedures, especially for SMEs and start-ups.
3. Financing competitiveness: An EU Savings and Investment Union will facilitate access to capital. A refocused EU budget will ensure that investments flow efficiently, while a competitiveness fund will pool strategic investments.
4. Promoting skills and quality jobs: A new initiative, the Union of Skills, will focus on lifelong learning, the integration of skilled workers and the promotion of mobility. Future-proof skills are to be developed and existing ones strengthened.
5. Better coordination of political measures at EU and national level: An instrument for coordinating competitiveness should ensure the implementation of common political goals. Cross-border projects of European interest are identified and supported in a targeted manner.