Deregulation or Undermining? The EU's “Omnibus” Green Rule Roll-Back Faces Legal Fire

In a move that could reshape the future of sustainability regulation in Europe, more than 100 legal scholars have raised serious alarms about the proposed “Omnibus” deregulation package from the European Commission. Their argument: this is not just administrative simplification — it threatens to violate core EU legal principles while diluting environmental and human-rights protections.

What’s going on?

At the heart of the story is the so-called Omnibus I directive, which is set to deliver sweeping changes to previously agreed sustainability- and reporting-legislation. These changes include:

• Delaying reporting deadlines for companies under sustainability obligations. :contentReference[oaicite:5]{index=5}
• Raising size thresholds so fewer companies are covered. :contentReference[oaicite:6]{index=6}
• Narrowing the scope of due-diligence obligations so they only apply to direct suppliers (thus excluding large swathes of the supply chain). :contentReference[oaicite:7]{index=7}

These reforms are proposed in the name of reducing the “regulatory burden” after Ursula von der Leyen pledged to cut EU regulations by 25 % at the start of the year. :contentReference[oaicite:9]{index=9}

Why the legal-scholar alarm?

Legal experts contend that the Omnibus I plan conflicts with fundamental aspects of EU law. They outline two major objections:

1. Disproportionate roll-back of rights: The changes reduce protections without adequate justification, and without proper impact assessments. This is argued to breach the principle of proportionality in EU law and the rights protected by the Charter of Fundamental Rights of the European Union. :contentReference[oaicite:11]{index=11}
2. Procedural shortcut: The Commission is using the “omnibus” mechanism — historically meant for minor technical updates — to deliver major modifications of recently adopted directives. The scholars argue this skips key steps such as consultation, alternative assessment, and rigorous impact evaluation. :contentReference[oaicite:12]{index=12}

If adopted close to the current form, these scholars warn that the directive faces a high risk of being annulled in front of the Court of Justice of the European Union. :contentReference[oaicite:14]{index=14}

Why this matters

The changes affect some of the EU’s most important tools to regulate corporate behaviour, sustainability, supply-chain impacts and environmental/human-rights compliance. These include the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The roll-backs here could mean:

• Less transparency in how companies impact the environment and society.
• Fewer companies being held accountable for negative impacts in their supply chains.
• A weakened strategic position for the EU’s single market in setting global norms for sustainability regulation.
• Increased regulatory uncertainty for companies, investors and civil society alike.

In short: what might appear as “cutting red tape” may in reality weaken some of the structuring legal frameworks of Europe’s green economy.

What’s next?

• The text of the Omnibus I directive is due for a vote in the European Parliament (committee JURI) — legal experts have urged delay and further legal review. :contentReference[oaicite:18]{index=18}
• If adopted, negotiations with EU member states will follow. The final form may yet change. :contentReference[oaicite:19]{index=19}
• In parallel: civil society, academic institutions and business groups will watch closely — either to defend the existing frameworks or to push for further roll-back.
• From a legal-risk perspective: companies and investors may have to contend with weaker protections, but also with increased uncertainty about future regulatory direction and potential legal challenge to the directive itself.

Final thoughts

The “omnibus simplification” label suggests something benign — a tidy reform, a cleaning up of red tape. But in this case, the implications go much deeper: the proposed changes could alter how Europe regulates sustainability, supply-chain ethics and corporate accountability.

If the legal concerns prove valid and the directive is later struck down, the fallout could stretch well beyond Brussels — affecting how companies plan, how investors assess risk and how civil protections are maintained. It’s a reminder: sometimes simplification is not just about efficiency — it’s about power, oversight and the future direction of regulation.