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EU SUSTAINABILITY OMNIBUS
Stop-the-Clock
Irish regulations were enacted in July, implementing the two-year deferral of CSRD reporting under the "stop-the-clock" directive. As a consequence, large Irish incorporated companies listed in the US will publish their first CSRD-compliant reports in 2028 (covering FY 2027). For further details, please see our update: Ireland Transposes 'Stop-the-Clock' Directive and Clarifies CSRD Scope.
Amendments to CSRD and CSDDD
The European Parliament is expected to adopt its negotiating position on the Omnibus proposals amending the CSRD and CSDDD later this month, with indications that it will favour raising the employee threshold for CSRD scope alongside a turnover threshold of EUR 450 million. Trilogue negotiations with the Council are anticipated to begin in November, and there is political momentum to reach agreement on the final text by year‑end.
ESRS Revision
EFRAG's public consultation on exposure drafts of the revised ESRS closed on 29 September. Feedback on the exposure drafts will form part of EFRAG's technical advice to the European Commission on revision of the ESRS, which is due to be delivered by 30 November 2025. The Commission anticipates that the ESRS revision process will be completed by FY 2027.
EFRAG also recently launched an ESRS Statistics and Reports portal, presenting insights from early implementation of the current set of ESRS by "wave 1" reporting companies.
Simplification of Taxonomy Reporting
On 4 July 2025, the European Commission adopted a delegated act to simplify Article 8 Taxonomy disclosure requirements, including the introduction of a materiality threshold, as outlined in our update: EU Taxonomy: Simplification Measures Adopted. The delegated act is currently under scrutiny by the European Parliament and the Council. Following a two-month extension agreed on 6 October 2025, the institutions now have until 5 January 2026 to object. If no objection is raised within that period, the Delegated Act will enter into force in the usual way. Large Irish-incorporated, US-listed companies will not be subject to Taxonomy disclosures until they begin CSRD reporting. The Commission is also launching a comprehensive review of Taxonomy reporting requirements and the technical screening criteria, including the "do no significant harm" criteria.
EUDR: POTENTIAL POSTPONEMENT
The European Commission has suggested a postponement of the entry into application of the EU Deforestation Regulation (EUDR) by one year, citing capacity issues with the IT systems used to process due diligence statements. If approved, this delay would push the implementation date from 30 December 2025 to 30 December 2026. This would be the second postponement of the EUDR, which was originally due to take effect from 30 December 2024 but was delayed by 12 months last year.
The EUDR aims to tackle deforestation and forest degradation by regulating the placement and export of certain products within the EU market. It imposes supply chain due diligence obligations on operators and traders of relevant commodities (cattle, cocoa, coffee, oil palm, rubber, soya and wood) and specified derived products.
CBAM: FULL EFFECT FROM JANUARY
The EU Carbon Border Adjustment Mechanism (CBAM) is currently in a transitional phase, running until the end of 2025. During this period, importers of covered goods (such as steel, aluminium, cement, fertilizers, and electricity) must report embedded emissions but are not yet required to purchase CBAM certificates.
The Council has formally adopted amendments to CBAM as part of the Sustainability Omnibus package. A key change is the introduction of a de minimis exemption for importers of less than 50 tonnes of CBAM goods per year, alongside streamlined compliance obligations, as outlined in our update: Carbon Border Adjustment Mechanism.
CBAM will take full effect from 1 January 2026, and the European Commission is currently finalising Implementing Regulations to support effective operation of the regime. For more see our recent update: CBAM: Consultation on Implementing Regulations.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
