The Parliament reached its formal negotiating position on the EU corporate sustainability framework (Corporate Sustainability Reporting Directive – CSRD and Corporate Sustainability Due Diligence Directive – CSDDD) on 13 November 2025.

Introduced as part of the Clean Industrial Deal, the Omnibus aims to cut the sustainability-related red tape by excluding more companies from requirements to collect and publish data on their greenhouse gas emissions, electricity use, and climate targets, etc., obligated through the CSRD and CSDDD.

Now that, to a large extent, the Parliament and the Council display interinstitutional alignment on descoping, this paves the way for smoother trilogues, with the final text potentially out by the year's end. Both agree on slashing the CSRD scope compared to its predecessor – the Non-Financial Reporting Directive (NFRD) – and reducing it by 63 % or more compared to the Commission’s Omnibus proposal, so that the pool of reporting firms could be reduced to 6,080.

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 sentiment might be somewhat cushioned by existing decarbonisation commitments, rising industrial and data centers demand for renewable electricity.

As the draft simplified European Sustainability Reporting Standards remove the requirement to disaggregate renewable energy consumption, including renewable fuels, this, combined with the CSRD descoping, also has implications for the biofuels markets. However, Veyt notes that the hold points in the market are the voluntary Greenhouse Gas Protocol rules and the Science Based Targets Initiative.

Legislative context

The simplification of the European sustainability reporting regime via the Omnibus package is one of the most politically contested legislations.

The US has actively lobbied against the directive, especially its climate provisions that would affect large U.S. corporations operating in the EU. As part of the framework for the EU-US trade agreement signed in August 2025, the EU:

The US prints trace to the ExxonMobil lobbying. The company’s CEO, Darren Woods, personally lobbied President Trump in early 2025 to make weakening the CSDDD a US trade priority. ExxonMobil held an influencing campaign: it had at least 25 meetings with EU policymakers on the Omnibus in 15 months, making it the most active company on this issue in the European Parliament.

At the same time, the European Commission is drawing up a playbook to convince the Trump administration that Europe is cutting red tape for American companies but on its own terms. The bloc’s ongoing deregulation spree via the Omnibus is therefore presented in such light.

European companies caught wind of the changing sentiment: in October 2025, in a coordinated letter addressed to President Emmanuel Macron and German Chancellor Friedrich Merz, 46 French and German companies, led by TotalEnergies and Siemens, called for the total abolishment of the CSDDD. The full list of signatories is undisclosed, although it could be assumed that the companies that the EU competitiveness chief, Stephane Sejourne, met at Evian on the same day are the letter’s signatories.

This set the stage for a significant CSRD/CSDDD descoping. After the lawmakers rejected a compromise deal in October, the centre-rightEuropean People’s Party (EPP) changed their coalition allegiance from the left Parliamentary groups and for the first time sided with the farther-right parties (Patriots and Europe of Sovereign Nations groups). Thus, on 13 November 2025, the European Parliament adopted its negotiating mandate.

Now that all the institutions have finalised their formal positions, the Commission, Parliament and the Council will commence negotiations, with the final text expected in Q1 2026.

Details

Scope reduction

Both the Parliament and the Council agree on reducing the pool of the CSRD-compliant companies from under 50,000 to around 6,080 or less in the EU (given the comparably larger Parliament's thresholds), assuming that all subsidiaries report. Scope reduction would also affect EEA countries.

As for the CSDDD, EU countries and the Parliament went beyond the Commission’s proposal by suggesting capturing only the largest companies through higher employee count and net turnover limits, reducing the number of impacted businesses (see below).

Transition plans

The obligation to implement decarbonisation plans (or ‘transition’ plans in Brussels speak), prescribed by the CSDDD, is removed as suggested by the Commission’s Omnibus package. Instead, companies need to outline emissions reduction steps in their plans.

Furthermore, these plans need no longer be “compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement <…> and the objective of reaching climate neutrality by 2050”.

To further reduce administrative burdens, the Council postpones the deadline for transition plans adoption to 26 July 2031.

Market impact

Under the Omnibus proposal, the Commission is set to adopt a voluntary sustainability reporting standard for companies falling outside of the CSRD/CSDDD scope. The standard is supposed to be based on the existing VSME developed by the Commission’s technical supervisory body, EFRAG. Originally scheduled for adoption in 2026, VSME 2.0 is now delayed to October 2027, along with the rest of the European Sustainability Reporting Standards (ESRS):

ESRS for listed SMEs;

Sector-specific ESRS;

ESRS for non-EU companies.

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. Since thousands of companies could be liberated from the CSRD duties (see table below), if the VSME 2.0 mirrors the current VSME and not the ESRS, there could be less of an incentive for market players to use RES-E GOs (bundled and unbundled), depressing potential demand from the corporate segment of the GO and PPA markets.

Furthermore, the Parliament suggests undertakings not to require information beyond voluntary reporting standards from their value chain companies (those that do not exceed 1,000 employees and EUR 450 million net turnover worldwide). If this proposal is agreed by the Council and the Commission, this could reduce the trickle-down effect for higher renewable electricity on the GO market.

Already, there are signs suggesting that mid-sized firms would not continue with voluntary reporting and are delaying ESG action due to the stop-the-clock mechanism that postponed CSRD application to 2028 for large companies with over 250 employees and to 2028-2030 for listed SMEs. Consultants, data platforms and assurance providers saw businesses drop CSRD-related projects in February 2025 when descoping was announced. Moreover, for mid-sized companies, the high annual cost of implementation and assurance seals the deal against voluntary reporting.

As a result, the CSRD landscape across the European countries could significantly change as fewer companies would remain in scope, less than under the CSRD predecessor – the Non-Financial Reporting Directive (NFRD), which used to cover just under 12,000 companies. According to some estimates, if the Council’s CSDDD thresholds are adopted, fewer than 1,000 European companies would be subject to due diligence requirements. With the Parliament’s scope even tighter, the number of affected companies would be even lower.

Note that Spain defied the Commission’s CSRD descoping, preserving the original scope thresholds and extending carbon reporting and reduction duties beyond large companies to public entities via the Climate Emergency Plan. The requirements will apply from 2026 onwards, likely increasing demand for RES-E from the Spanish market. Veyt will follow up with a separate analysis.

Some estimates suggest that between 15 and 40 % of firms that used to be in the CSRD scope will continue to do sustainability reporting. Question marks remain whether these companies will pursue full voluntary reporting according to the VSME or ESRS, or will do informal bilateral disclosures to business partners that require the data down their supply chain.

Separately, as the EU pursues deregulation, the ESRS is simplified, leading to some weakened language in Scope 2 target setting, which used to explicitly require disclosure of GHG reduction goals according to location- or market-based methods. The final ESRS are due by the year’s end.