On 8 December 2025, the European Parliament and the Council reached a political agreement on the Omnibus proposal amending sustainability reporting and due diligence rules (the Corporate Sustainability Reporting Directive – CSRD, and the Corporate Sustainability Due Diligence Directive – CS3D).
The accord raises company size thresholds, leaving fewer reporting companies in scope: just under 5,000 companies under the CSRD and 1,000 under the CS3D. For comparison, the Commission initially suggested limiting the scope to 11,000 entities through its Omnibus proposal.
This bearish legislative signal could reduce demand for Power Purchase Agreements (PPAs) and contribute to the pessimistic outlook on the Guarantees of Origin (GO) market in the medium run. However, the descoping may have already been accounted for in the GO market prices, that was announced back in February 2024. The news could trigger the prices to slide downwards further, now that fewer than expected companies would be reporting on a mandatory basis.
The sentiment might be somewhat cushioned by existing decarbonisation commitments, rising industrial and data centers demand for renewable electricity (the latter are subject to renewable electricity consumption reporting from 2026 onwards), and Spain’s more ambitious sustainability reporting regime, applicable in 2026 for FY2025.
Both the Parliament and the Council agreed on reducing the pool of the CSRD-compliant companies, raising the company threshold size to undertakings with more than 1,000 employees and a net turnover of EUR 450 million at the group level. Exemptions apply to listed subsidiaries if their parent companies report on a consolidated basis and to financial holdings.
Non-EU companies fall under similar thresholds: a net turnover of EUR 450 million with a subsidiary and a branch with over EUR 200 million in net turnover.
Listed SME, initially within the scope of the CSRD, are excluded from the mandatory reporting requirements.
This would liberate 90 % of the originally intended companies (both in the EU and EEA) from the mandatory sustainability reporting, leaving just under 5,000 undertakings in scope.
As for the CS3D, only companies with more than 5,000 employees and EUR 1.5 billion in net turnover are covered (applies to both EU and non-EU companies), resulting in 1,000 reporting entities.
A further scope reassessment is planned for 2031, to be in line with the EU 2040 climate target of 90 % GHG emission reduction.
CSRD implementation has already been delayed by two years, from 2026 to 2028, via the stop-the-clock
The CS3D transposition deadline is postponed by another year to 26 July 2028, with companies expected to comply with the due diligence rules by 29 July 2029.
The obligation to implement decarbonisation plans per CS3D requirements (or ‘transition’ plans in Brussels speak), prescribed by the CSDDD, is removed.
Yet, per CSRD, companies need to disclose information about a climate plan or indicate whether and when the company plans to adopt one.
The legislation imposes a limit on information requests so that companies can only request data according to the voluntary sustainability reporting for small and medium-sized companies (VSME). If requests exceed what’s covered by the VSME, the suppliers have the right to refuse.
Currently, VSME defaults to location-based reporting for Scope 2 emissions, with market-based reporting optional, departing from the ESRS approach of dual reporting. Yet most VSME GHG tools enable calculating market-based Scope 2 emissions.
Companies falling outside of the EU mandatory sustainability reporting regime under the CSRD will be encouraged to use a yet-to-be specially designed voluntary standard, based on the VSME.
Sector-specific ESRS have been eliminated from the CSRD. Instead, the lawmakers recommend the Commission consider sector-specific guidelines, with no deadline for their issuance.
Since the Omnibus announcement in February 2024, GO prices slid across all vintages and have been on a downward trajectory since. With less ambitious company thresholds now agreed compared to the original CSRD, this development sends a bearish signal to the GO market. However, likely, a weaker sustainability reporting regime has already been priced in the market, given earlier policy signals.
The revamped CSRD and CS3D would apply to fewer entities (4,792 and 1,000 firms, respectively) than their predecessor, the Non-Financial Reporting Directive (NFRD), which previously covered just under 12,000 companies.
The NFRD did not obligate environmental metrics disclosure, such as energy consumption and Scope 2 emissions, in accordance with a specific set of standards, instead providing guidelines and referring to voluntary standards that could be employed (e.g. CDP, GRI).
In comparison, the CSRD is more stringent, requiring adherence to the current set of the ESRS (the standard is currently revised; Veyt will follow up with a separate analysis). These, in turn, mandate energy consumption mix and Scope 2 GHG emissions disclosure according to the market-based method. In this sense, the regulatory signal to the market signal is not “diluted”, as the use of contractual instruments such as GOs and PPAs is incentivised.
Furthermore, the CSRD company threshold number is likely to be higher as Spain deviated from the EU regulatory pull-back by adopting a climate emergency plan, which raises the bar for sustainability reporting by extending the disclosure duty to more companies than the descoped CSRD and public entities.
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