Experts from Bank Pekao S.A. in their latest report outline the detailed assumptions of the latest EU plans regarding green regulations, also sketching their possible effects on companies and the horizon of further legislative and strategic actions in this area.

On February 26, 2025, the European Commission published extensive proposals aimed at simultaneously increasing the competitiveness of European industry and simplifying EU sustainable development regulations.

European Green Deal in a New Edition

The European Union has been creating ambitious climate policies for years, but economic reality is failing to keep up with ideals. Recent years have shown that tightening environmental requirements can impact the competitiveness of EU industry. A broad debate has begun in public opinion and expert circles about reorienting the EU regulator's previous actions in the ESG area, additionally stimulated by dynamic geopolitical changes. In response, the European Commission published Omnibus I and II packages and the Clean Industrial Deal, which mark the beginning of a path towards greater balance between climate ambitions and the ability of the European economy to compete in the global market.

Economic Background: Why This Course Correction?

The new proposals from the European Commission are a clear signal that the Union wants to reconcile ambitious climate goals with the need to ensure affordable energy prices, a strong position for European industry on the global stage, and the creation of new jobs. These actions are also intended to increase the resilience of the EU economy to external economic and political shocks. "The European Commission is changing its approach, increasingly focusing on strengthening the economy by simplifying regulations and increasing the investment attractiveness of the EU. The correctness of these actions is confirmed, among others, by the famous Draghi Report and the EU Competitiveness Compass. The EU is switching from a 'restrictive' mode to a more 'supportive' mode, providing new financial and legal incentives for green investments," says Krzysztof Mrówczyński, manager of the sector analysis team from the Macroeconomic Analysis Department at Bank Pekao S.A.

Omnibus Packages: Less Bureaucracy, More Flexibility

The primary goal of the Omnibus package series is to reduce administrative burdens by 25% for large companies and as much as 35% for SMEs, while maintaining high environmental standards. This is the first step towards deregulating ESG policies. Their main assumptions include: reducing reporting requirements (e.g., a drastic decrease in the number of companies subject to reporting obligations), significantly reducing bureaucracy for SMEs (introducing a simplified, voluntary standard), and changes in the CBAM border tax mechanism (exempting smaller importers – who constitute the vast majority but account for a marginal part of total emissions). The proposed regulatory changes aim to reduce the complexity of EU requirements for all enterprises, especially SMEs and small mid-cap companies, focus regulatory frameworks on the largest enterprises that have a much greater impact on the climate and environment, and simultaneously enable companies better access to sustainable financing for clean transformation.

According to Pekao expert Ewa Kurek, author of the report - The changes proposed in the packages are still just projects that must go through the full legislative process. They introduce considerable uncertainty. In practice, the CSRD Directive regulations introduced into the legal order three months ago are in force, and today the prospect of significant regulatory modifications and potential postponement of reporting obligations for a large part of Polish enterprises is already emerging.

EU Clean Industrial Deal: Green Transformation in the Service of Competitiveness

The overarching goal of the strategic initiative "Clean Industrial Deal" and the related "Affordable Energy Action Plan" is to make decarbonization a driving force for industry in the EU. CID provides for additional investments of over 100 billion euros, which are to support the development of clean technologies, decarbonization of the energy-intensive sector (such as the steel, metal, and chemical industries), and further stimulate the development of the circular economy. Much attention is also devoted to creating mechanisms to reduce energy costs for industry, which would be a significant factor in improving competitiveness for many of its branches.

More information on this topic can be found in the report "New Regulatory Reality in the EU: How Will the Two Omnibus Packages and Clean Industrial Deal Change the Green Rules of the Game?". The material by experts from the Macroeconomic Analysis Department Ewa Kurek and Krzysztof Mrówczyński was prepared in cooperation with Piotr Kowalik, ESG manager at Pekao Investment Banking, and Aleksandra Sapiejewska and Adam Błasiak, experts from the Corporate Banking Strategy and Development Department at Bank Pekao S.A.