The EU is redefining its regulatory agenda in what the bloc’s authorities say is a bid to increase the competitiveness of businesses. In-House Perspective looks at how companies can navigate the EU’s Omnibus simplification packages.

The EU is on a mission to – in its words – streamline its rules to reduce compliance complexity for corporates and boost the bloc’s competitiveness. At the heart of this is the European Commission’s target to lower the regulatory burden by at least 25 per cent for all businesses, and by at least 35 per cent for SMEs.

To help meet this goal, the EU executive put forward ten so-called Omnibus simplification packages in 2025, covering a range of policy areas such as sustainability, digital rules, environmental legislation, agriculture and defence. Most of these packages are still at negotiation stage.

The packages cover a variety of regulations and directives, a number of which have only been adopted in recent years, such as the EU AI Act and the two sets of rules on corporate sustainability that are affected.

The proposals are often broad in scope, featuring the streamlining of more technical or administrative rules and attempts to cut disclosure requirements.

But they also cover controversial subjects such as planned delays to the rules on ‘high-risk’ AI, a proposed revision of the definition of ‘personal data’ in the General Data Protection Regulation (GDPR) and changes regarding the re-evaluations of pesticides.

‘In the near term, I think a lot of important EU regulatory activity may come through simplification, revision and consolidation of existing frameworks rather than entirely new regimes,’ says Steven Brennan, CEO and co-founder of Foresight, a regulation intelligence software platform.

For in-house legal and compliance teams, this can create ‘a lot of legal and operational change, especially where existing obligations are amended, delayed, narrowed or subject to transitional arrangements’. He adds that ‘many companies will be affected by more than one Omnibus package, and that does create near-term uncertainty’.

‘Really quite something’

Some of this uncertainty comes from political negotiations that are far from straightforward. These debates have seen the emergence of a tug-of-war between those who believe the bloc is introducing necessary cuts to regulatory burdens, and those who say the slashing of rules amounts to unwelcome deregulation. Indeed, the first Omnibus proposal – covering sustainability disclosure and due diligence – saw heated and lengthy debate within the European Parliament.

There could be more political wrangling and uncertainty on the horizon. Most Omnibus proposals are still going through the legislative process, and there are currently three more planned for launch later in 2026.

The Commission says that the Omnibus packages launched to date will reduce ‘recurrent administrative costs’ for companies by almost €12bn combined. Changes will be implemented through introducing new legislative texts as well as delegated acts – which set out the so-called Level 2 technical details of EU rules. Some of the simplification efforts also involve delaying compliance deadlines and, in some cases, reducing the number of companies in scope of certain rules.

The overall goal of reducing the regulatory burden for companies has been welcomed by many industry associations and companies in consultation responses and public statements. However, in the near-term it means regulatory uncertainty for companies and their legal experts, according to those who spoke to In-House Perspective. ‘Ten Omnibus packages is really quite something,’ says Nicolas Carbonnelle, a partner at Bird & Bird in Belgium, who is following the most recently launched Omnibus on food and feed safety, which was presented to Members of the European Parliament (MEPs) on 5 May.

The simplification plan in this area is wide-ranging. The key measures proposed include faster procedures to give bio-control products market access, more ‘targeted and efficient’ renewal procedures for feed additive authorisations as well as pesticides, and streamlined measures for fermentation products using genetically modified micro-organisms. ‘It’s very important for in-house counsels to monitor this,’ says Carbonnelle.

‘At the moment, it’s just an initiative, but one that will impact compliance and could have quite some impact on their day-to-day operations,’ he says. ‘They need to look at what’s covered and what’s not – massive parts of the industry will be impacted by the proposed changes.’ Carbonnelle adds that there many opportunities for the industry to engage and contribute to the debate and says that ‘the time is now’.

While the food and feed safety Omnibus is still in the early stages, a European Parliament committee meeting in May painted a picture of difficult political negotiations ahead, with some MEPs broadly welcoming the proposal, others believing that it doesn’t go far enough and a number of lawmakers expressing strong opposition to some of the proposed simplifications.

A proposal to simplify pesticides legislation in particular drew ire from some quarters. ‘It’s very difficult to anticipate before we have the final text, of course, but the proposal right now looks like a revisit of certain processes that are either outdated or need to be brought into alignment with the latest scientific developments,’ says Carbonnelle. ‘There is also a willingness to simplify and streamline certain processes – but to me, it does not amount to deregulation.’

However, he acknowledges that a number of points are ‘controversial’ and he expects intense debate. ‘This process will take some time – I don’t think we’ll see a quick fix,’ he says. ‘The very fact that the text is [putting forward] a broader proposal scheme for pesticides will see quite some resistance among some stakeholders, while on the other hand there is lots of pressure from farmers and some political groups to adopt this.’ Ultimately, the initiative may be ‘significantly reworked or split,’ he adds.  

Digital risks

While simplification is welcomed by many companies, drawn-out political discussions amount to uncertainty for them and their legal counsel, says Johan Hübner, Vice-Chair of the IBA Technology Law Committee, who is following the proposals to simplify the EU AI Act, which fall under the Digital Omnibus.

The Digital Omnibus on AI was proposed in November to introduce what the Commission says are simpler and more ‘innovation-friendly’ rules in this area. The planned simplifications include, among other things, extending the deadline for companies to comply with rules around high-risk systems and reducing the complexity of technical requirements for SMEs.

After political negotiations between MEPs and Member State representatives broke down in April, a compromise and provisional agreement was later reached on 7 May. It must still be formally approved by lawmakers, with a view to adopt the changes ‘in the coming weeks,’ according to a Council of the EU statement.

For companies needing to comply with the ‘high-risk AI obligations’ of the EU’s AI Act by 2 August, this is becoming a nailbiter, says Hübner, who was a partner at Advokatfirman Delphi in Stockholm at the time of the interview, and is set to soon join DLA Piper Sweden as partner.

‘Most companies believe the safest approach is to assume that the simplification will not be in place by 2 August,’ he says. ‘This is a reasonable approach. The first reason is the legal risk. Secondly, from a corporate ESG perspective, it’s also almost always better to be best-in-class if you’re a serious player. Also, imagine if you pause your compliance now to then have to kick it off in, say, June. It will be more expensive than to just press on.’

In terms of cost reduction for those companies in scope, this is a blow, Hübner explains, as the costliest and most time-consuming part of compliance is the initial set-up. ‘Potential cost savings would then fall through,’ he adds. More broadly, he says that ‘an unfortunate effect of almost all EU regulations is that they impact SMEs disproportionately’. For this reason, ‘SMEs are probably more concerned about playing it safe at this point,’ rather than putting their compliance efforts on hold.

Hübner’s concerns are echoed by Kreeti Khandelwal, a privacy and AI governance lawyer based in Delhi, who serves as Senior Director – Legal at Indian home rental platform Nestaway.

‘The uncertainty around the AI Omnibus is creating a more complex challenge than a strict compliance deadline would have,’ she told In-House Perspective shortly after the April negotiations collapsed. ‘Most in-house teams are not pausing preparation, but they are shifting towards building “no-regret” capabilities focusing on governance structures, risk classification frameworks and documentation processes that would remain relevant irrespective of how the Omnibus negotiations evolve.’

Khandelwal is seeing a ‘noticeable divide in approach,’ with larger companies ‘continuing with full-scale AI Act readiness programmes, while mid-sized companies are becoming more cautious, often waiting for clarity before committing significant resources’. Nonetheless, the Omnibus proposal ‘does have clear advantages – it acknowledges implementation friction and attempts to make compliance more practical,’ she says.

Hübner also says that, aside from the timings, he believes the AI and wider Digital Omnibus represent good initial attempts to simplify rules for companies. ‘It’s a step in the right direction, [but] not enough to really boost competitiveness,’ he says.

This opinion isn’t limited to discussions about the Digital Omnibus. Indeed, there’s a broader question about whether the efforts to absolve companies of administrative burdens work to the extent that lawmakers have set out. In addition, there are queries regarding whether they truly help respond to the EU competitiveness concerns voiced by former European Central Bank President Mario Draghi in his flagship 2024 report.

Feeling the effects

While it’s too soon to answer such questions, those following the first Omnibus package have had some time to reflect and feel the initial effects of amendments to the corporate sustainability rules in scope.

The first Omnibus postponed certain sustainability corporate reporting and due diligence requirements in spring 2025. At that point, the Commission proposed to remove around 80 per cent of companies from the scope of mandatory Corporate Sustainability Reporting Directive (CSRD) reporting.

The final package, which entered into force in March, effectively limits CSRD reporting to the largest companies active in the bloc, with the threshold for mandatory disclosure raised to businesses with more than 1,000 employees and above €450m in net annual turnover.

The original rules, adopted in 2022, would have been phased in to cover both listed and private companies with more than 250 employees, €40m in turnover or €20m in assets. The plan was for more than 50,000 companies to be covered eventually.

Brennan says the reduced scope and reporting obligations will be helpful for some companies, but larger businesses and those ‘exposed to investor, customer or supply-chain expectations may still need robust sustainability data and governance even if formal reporting obligations are reduced’. Simplification, then, ‘may reduce the legal burden, but it does not necessarily remove the commercial or reputational need to understand sustainability risks,’ he says.

A sustainability reporting study of 400 companies across Europe supports this. Out of the estimated one-quarter of respondents that were excluded from the scope of CSRD reporting, 90 per cent said they would continue or expand their sustainability reporting.

Donato Calace, a senior vice-president at ESG software analytics provider Datamaran, believes the goal of the sustainability Omnibus ‘wasn’t really reached,’ unless the goal is measured ‘in terms of reduction of companies in scope – but that’s a very narrow way of measuring it’. He adds that ‘it doesn’t make any difference for a company if they [then] have 20 different suppliers and a number of investors asking for their Scope 3 emissions anyway.’

Calace – who also served on the EU standards body EFRAG’s expert working group tasked with developing the underlying reporting framework for the CSRD – thus questions the narrative that reducing sustainability reporting obligations under EU law is helping companies to be more competitive internationally.

Instead, it could make the gathering and disclosure of sustainability information more inefficient and fragmented, because the EU standard is now applicable to significantly fewer companies, he says. ‘Some groups believe that the EU overreaches when it comes to regulation, and that the solution is to have less. My personal view is that they’re wrong – I always saw the Brussels Effect as a competitive advantage,’ he says, referring to the EU’s ability to influence standards and policies beyond its own borders.

He believes the European Commission’s estimate of €4.5bn in savings per year for companies as a result of the simplifications to the CSRD and the Corporate Sustainability Due Diligence Directive amount to ‘rounding errors’ in the grand scheme of things. ‘You can’t turn the EU into Silicon Valley or China just by watering down regulations,’ he says.

Looking at the initial reactions to whether the latest Omnibus on food and feed safety addresses industry concerns, Carbonnelle says he has seen mixed responses. ‘Some parts of the proposal are perceived as a step in the right direction, but others are less comprehensive,’ he says.

In addition, the proposal doesn’t set out ‘anything substantial’ on how the European Food Safety Authority will be staffed and supported going forward, he says, noting that this is a concern for many in the industry as the agency is perceived as understaffed and insufficiently resourced.

Meanwhile, as the remaining Omnibus packages evolve, it’s important for companies and in-house counsel to follow developments throughout the legislative process and ‘not just [at] the point of adoption,’ says Brennan. ‘Something presented as administrative simplification may still have quite material consequences for compliance teams. The important thing is to translate the legal development into practical business impacts: reporting systems, product compliance, supply chain due diligence, procurement, sustainability claims, market access and governance.’

EU Omnibus proposals An Omnibus is a package of legislative proposals that amend multiple EU legal acts at the same time, usually in the same policy area. The European Commission launched ten Omnibus proposals in 2025, many of which are still going through the legislative process. The goal is to reduce ‘recurrent administrative costs’ for companies, part of an attempt to limit regulatory burdens and boost EU competitiveness. The ten proposals are: Omnibus X: food and feed safety Omnibus IX: vehicles Omnibus VIII: environmental legislation Omnibus VII: digital Omnibus VI: chemicals Omnibus V: defence readiness Omnibus IV: small mid-caps, digitalisation and common specifications Omnibus III: common agricultural policy Omnibus II: investment simplification Omnibus I: sustainability An additional three Omnibus packages have been announced so far for 2026, covering: energy product legislation; taxation; and citizens omnibus (covering travel and tourism, for example). Source: European Commission (https://commission.europa.eu/law/law-making-process/better-regulation/simplification-implementation-enforcement/simplification_en )