What the EU Omnibus I Approval Actually Means for Your CSRD and CSDDD Compliance Plan

The European Council gave final approval to the Omnibus I package today, February 24, 2026, marking the most dramatic rollback of EU sustainability regulation since the Corporate Sustainability Reporting Directive (CSRD) was introduced. If you're a sustainability leader managing your organization's compliance strategy, this decision demands immediate attention — not because it simplifies your work, but because it creates a complex new landscape where regulatory scope narrows while enforcement pressure actually intensifies.

The headlines will focus on the "deregulation," but the reality facing enterprise sustainability teams is far more nuanced. While an estimated 90% of companies will fall outside the revised CSRD scope, the underlying drivers of carbon accountability — CBAM financial obligations, criminal liability under the Environmental Crime Directive, and contractual pressure from large buyers — are accelerating, not slowing down.

The Omnibus paradox: regulatory scope shrinks, enforcement pressure grows

The final Omnibus agreement went much farther than the European Commission's original proposal. What started as a plan to raise CSRD employee thresholds from 250 to 1,000 has become a comprehensive rescaling of EU sustainability obligations.The key changes effective today:

• CSRD scope: Now requires >1,000 employees AND >€450 million revenue (vs. previous 250 employees OR €50 million)
• CSDDD scope: Raised to >5,000 employees AND >€1.5 billion revenue, with implementation delayed to July 2029
• Climate transition plans: Mandatory requirement removed from CSDDD
• EU-wide liability: Eliminated, with penalties capped at 3% of global revenues
• SME data requests: Limited to voluntary standard (VSME) scope

This creates what we're calling the "Omnibus paradox." Companies celebrating their exit from formal CSRD or CSDDD scope may discover they still face the same underlying compliance pressures through different enforcement mechanisms.

Why the paradox exists:

1. CBAM operates independently: The Carbon Border Adjustment Mechanism entered its financial phase on January 1, 2026, with default value penalties escalating regardless of CSRD scope
2. Criminal liability timeline unchanged: The Environmental Crime Directive introduces criminal liability by May 2026, affecting environmental compliance regardless of CSDDD status
3. Supply chain contracts remain binding: Large enterprises still in CSRD/CSDDD scope will continue requiring supplier data through contractual obligations
4. Investor pressure persists: Asset managers managing €6.6 trillion warned that weaker EU mandates create data gaps, not reduced expectations

Are you still in scope? New CSRD and CSDDD thresholds explained

For CSRD (effective January 2027):

The new dual threshold system means you need BOTH criteria to be in scope:

• More than 1,000 full-time employees, AND
• Net turnover exceeding €450 million

Exemptions include:

• Financial holding entities
• Wave 1 entities (those already reporting for FY2024) that fall below new thresholds can opt out for 2025 and 2026 reporting

For non-EU companies:

• EU turnover threshold: €450 million (no employee threshold)
• Reporting timeline: 2029 for FY2028 (technical standards expected October 2027)

For CSDDD (effective July 2029):

The thresholds have been dramatically raised:

• More than 5,000 employees, AND
• Net turnover exceeding €1.5 billion

Key removals:

• Mandatory climate transition plans (though CSRD still requires disclosure on transition plans)
• EU-wide civil liability regime
• Systematic information requests from smaller value chain companies

Critical detail: Both directives include review clauses, meaning scope could be extended again in future legislative cycles.

What doesn't change: CBAM, criminal liability, and supply chain demands

The Omnibus approval does not eliminate the fundamental drivers pushing enterprises toward comprehensive carbon data collection. In fact, several enforcement mechanisms are intensifying precisely as formal regulatory scope narrows.

CBAM financial obligations are live and escalating:

Since January 1, 2026, companies importing iron, steel, aluminium, cement, fertilizers, or hydrogen into the EU must declare embedded emissions with their first filing due September 30, 2027. The penalty structure for relying on default values rather than actual supplier PCF data creates direct financial incentives for supply chain carbon data collection:

• 2026: 10% markup on default values
• 2027: 20% markup
• 2028 and beyond: 30%+ markup

Companies without supplier-specific carbon data face escalating costs that make PCF data collection an immediate ROI calculation rather than a compliance exercise.

Environmental Crime Directive creates personal liability:

The Environmental Crime Directive, entering force by May 2026, introduces criminal sanctions for environmental violations. This operates entirely separately from CSRD/CSDDD scope and affects any company whose operations could trigger environmental crimes under national implementation.

Supply chain contractual pressure continues:

Large enterprises remaining in CSRD/CSDDD scope — including companies like Tetra Pak, Atlas Copco, OPmobility, Honeywell, and Siemens identified in recent market intelligence — will continue requiring supplier carbon data through commercial contracts. The Omnibus "value-chain cap" limits excessive data requests to VSME standards, but material PCF data for high-carbon-intensity products remains commercially necessary.

TfS network momentum accelerating:

The Together for Sustainability network's recent expansion (Novonesis joining in February 2026, P&G and Caldic in October 2025) shows that industry-driven carbon data exchange is advancing faster than regulatory timelines. TfS PCF Guideline v3.1 and Catena-X PCF Verification Framework v2 create de facto supplier data requirements that bypass formal regulatory scope.

Your immediate action plan for the next 30 days

Week 1: Scope reassessment

1. Calculate your new status: Apply both employee and revenue thresholds for CSRD; both employee and revenue thresholds for CSDDD
2. Map your exemptions: Identify which transition reliefs apply if you're Wave 1 falling out of scope
3. Document customer requirements: Audit existing contracts for carbon data obligations that persist regardless of regulatory scope

Week 2: Risk environment assessment

1. CBAM exposure audit: Identify imports of covered goods (iron, steel, aluminium, cement, fertilizers, hydrogen) and calculate financial impact of default value penalties
2. Environmental crime risk screening: Review operations for potential exposure under Environmental Crime Directive criminal sanctions
3. Supply chain mapping: Identify which customers/partners remain in CSRD/CSDDD scope and will continue requiring data

Week 3: Strategic positioning

1. Data infrastructure decision: Determine whether to maintain, scale down, or wind down carbon data collection capabilities based on actual business drivers vs. regulatory requirements
2. Competitive advantage assessment: Evaluate whether supplier carbon data capabilities provide market differentiation even outside mandatory scope
3. Stakeholder communication: Prepare messaging for investors, customers, and suppliers about your compliance approach post-Omnibus

Week 4: Implementation planning

1. Technology roadmap adjustment: Align carbon accounting platform strategy with actual data needs vs. regulatory minimums
2. Budget reallocation: Redirect compliance resources toward highest-impact areas (CBAM data, commercial requirements, voluntary disclosure)
3. Monitoring system: Establish tracking for regulatory review cycles that could re-expand scope in 2027-2028

Why CO2 AI's approach works regardless of formal scope

The Omnibus approval validates CO2 AI's platform architecture, which was designed for the underlying business need — accurate, verifiable, supplier-specific carbon data — rather than specific regulatory requirements. Whether you're managing CBAM import obligations, responding to customer PCF requests under TfS standards, or maintaining competitive positioning in carbon-intensive sectors, the core data infrastructure requirements haven't changed.

CO2 AI's differentiation in the post-Omnibus environment:

PCF calculation at scale: Our platform generates product-level carbon footprints aligned with TfS PCF Guideline v3.1 and Catena-X standards — the methodologies referenced for CBAM compliance and increasingly required by automotive and chemicals supply chains.

Supplier engagement tools: The "value-chain cap" in Omnibus limits data requests to VSME standards, but material impacts require actual data. CO2 AI's supplier onboarding and data collection workflows ensure you can gather decision-useful information efficiently while respecting SME boundaries.

CBAM-ready outputs: Our platform generates the verified emissions data needed to avoid default value penalties under CBAM, directly addressing the financial drivers that persist regardless of CSRD scope.

BCG partnership advantage: As regulatory frameworks continue evolving — with review clauses in both CSRD and CSDDD — CO2 AI's BCG partnership provides strategic insight into regulatory trends and business implications that extend beyond compliance minimums.

The Omnibus I approval represents a regulatory recalibration, not an end to carbon accountability. Smart sustainability leaders will use this moment to align their data infrastructure with the actual business drivers — financial, commercial, and competitive — that make carbon transparency a strategic capability rather than just a compliance obligation.

Ready to navigate the post-Omnibus landscape? Book a consultation with our team to assess how the regulatory changes affect your specific situation and explore how CO2 AI's platform supports both compliance minimums and competitive advantage in the new environment.