Sustainability regulatory updates, the circular economy and the environment

 

Omnibus

EU Taxonomy

EU releases Voluntary Sustainability Reporting Standard for SMEs

On 30 July 2025, the European Commission released a Recommendation endorsing the VSME standard developed by EFRAG as a voluntary reporting framework for non-listed small and medium-sized enterprises with up to 1,000 employees. This initiative follows the Commission’s February 2025 Omnibus I simplification proposal, which seeks to reduce mandatory sustainability reporting to companies exceeding 1,000 employees and authorise a delegated act to establish a voluntary standard based on VSME. While the VSME recommendation will serve as the foundation for this future standard, the Commission notes that modifications may be necessary depending on legislative developments and revisions to European Sustainability Reporting Standards (ESRS). The adoption of the delegated act will follow established procedures under the Accounting Directive, including consultations with Member States, EU bodies, and a public feedback period. The Commission recommendations 2025/1710 can be seen here and the Annex here

 

CSRD: Corporate Sustainability Reporting Directive

EFRAG Analysis Reveals Key Trends in First CSRD Reports

EFRAG’s analysis of 656 first-year CSRD reports highlights strong trends and notable gaps in sustainability reporting. Report length and style differ widely across Europe, with Southern countries publishing much longer disclosures (Spain averaging 222 pages) compared to Northern ones (Denmark averaging 69 pages). Despite this variation, report structures remain broadly consistent, allowing for high-level comparability.

Most companies concentrated on climate (E1), workforce (S1), and business conduct (G1)—all addressed by over 90% of reporters. However, areas such as biodiversity (E4) and microplastics (E2) were rarely included (less than 5%). Only 10% of companies reported across all 10 topical standards.

Stakeholder engagement emerged as a major weakness: just 20% of companies involved unions in their double materiality assessments. Meanwhile, 55% disclosed climate transition plans, though widely varying levels of detail limit comparability.

EFRAG Launches Simplified ESRS Drafts and Opens 60-Day Public Consultation: On 31 July 2025, EFRAG released revised and streamlined Exposure Drafts of the European Sustainability Reporting Standards (ESRS) and launched a 60-day public consultation. This follows a request from the European Commission to simplify the 2023 ESRS to make sustainability reporting under the CSRD more manageable while maintaining alignment with the Green Deal. Drawing on feedback from over 800 survey responses and stakeholder engagements, EFRAG reduced mandatory datapoints by 57%, total disclosures by 68%, and overall length by over 55%, while streamlining double materiality assessments, eliminating voluntary disclosures, and introducing relief mechanisms for undue cost burdens. The consultation runs until 29 September 2025, alongside outreach events, a cost-benefit analysis, and field tests, with final technical advice due by 30 November 2025.

EU CBAM

The European Commission released the proposal for the regulation amending Regulation (EU) 2023/956 to simplify and strengthen the Carbon Border Adjustment Mechanism (CBAM) to delegations so they can examine the revised legislative financial and digital statement.  The proposal sets out the framework of the initiative, policy area climate policy, objectives, specific targets (including reducing administrative burden and improving CBAM’s functioning), expected impacts (such as reducing greenhouse gas emissions and carbon leakage, replacing free allocations under the EU ETS, and generating revenues estimated above EUR 2.1 billion by 2030), transitional and definitive implementation periods (with full operation from 1 January 2026), rationale, budget implementation under the EU budget, and the estimated financial and digital impact through 2027.

 

 

Recent publications regarding sustainability regulatory updates, the circular economy, and the environment (non-exhaustive).

Entity	Date	Publication
China	15/07/2025	In July 2025, Chinese financial regulators released a green finance framework—known as the Green Finance Endorsed Project Catalogue—that systematically defines which economic activities qualify for green financing. This newly published Green Finance Endorsed Project Catalogue provides a categorization system to help financial institutions and investors identify eligible projects for green loans, bonds, and other green financial instruments. It serves as an updated taxonomy, guiding market participants on what constitutes a “green” activity in China.
European Parliament	15/07/2025	The European Parliament’s Committee on the Environment, Climate and Food Safety, has issued a Recommendation for second reading on the Council’s position at first reading regarding the directive amending Directive 2008/98/EC on waste. The Parliament approves the Council’s first-reading position, confirms that the act is adopted in accordance with that position, and instructs its President and Secretary‑General to arrange for signing with the Council, publication in the Official Journal, and forwarding to the Council, Commission, and national parliaments
UK Government	21/07/2025	The UK’s Product Regulation and Metrology Act 2025, which has received Royal Assent, establishes a framework granting the government broad powers to create future regulations on product safety, performance, legal metrology, and online marketplaces, largely aligning with the EU General Product Safety Regulation (GPSR). While the Act itself does not introduce immediate requirements, it enables secondary legislation covering tangible products marketed in the UK, including those sold via online platforms, with exclusions such as food, medicines, and military equipment. It was introduced to address gaps in existing laws regarding online marketplaces, emerging technologies, and enforcement, and is expected to impose statutory duties on platforms to prevent unsafe products, ensure seller compliance, share safety information, and cooperate with authorities. The government has also published a Code of Conduct committing to proportionate, evidence-based regulation, and businesses are advised to prepare by monitoring consultations, engaging with platforms, reviewing compliance documentation, and considering EU GPSR alignment.
TRIS/Germany	22/07/2025	Germany Notifies Draft on F-Gas Regulation via TRIS Germany has notified through TRIS a draft regulation that abolishes national provisions currently contained in the F-gas Regulation (EU) 2024/573 (§ 12i and § 12l). The draft clarifies when transfers of hydrofluorocarbons must be accompanied by a declaration (§ 12j) and specifies the ban on placing pre-filled equipment on the market under the F-gas Regulation to prevent circumvention (§ 12j). New injunction powers have been introduced to provisionally prohibit the use, manufacture, import, export, and placing on the market of fluorinated greenhouse gases and ozone-depleting substances, as well as related products and equipment (§ 23a). In addition, the authority to issue statutory instruments on prohibitions and restrictions has been adjusted to establish a concrete legal basis for expertise requirements (§ 17).
TRIS/Germany	22/07/2025	Germany Notifies Replacement of Chemicals-Climate Protection Regulation via TRIS Germany has notified through TRIS a draft regulation that replaces the existing Chemicals-Climate Protection Regulation and adds further requirements to the F-gas Regulation (EU) 2024/573. The draft recasts national provisions on the certification of personnel and companies, introducing rules on refresher training and on converting old certificates into new ones (§§ 6–13). It clarifies operator obligations (§ 15) as well as the obligations in the EU F-gas Regulation concerning the sale and purchase of fluorinated greenhouse gases, with reference to the national certification scheme (§ 16). The regulation also retains national emission limit values for equipment containing fluorinated greenhouse gases (§ 3), extends collection duties from hydrofluorocarbons to all fluorinated greenhouse gases with free collection after a transitional period (§ 5), and maintains the requirement to provide certain information in German in user manuals and advertising materials, adding an obligation to mark facilities when using the safety exception (§ 14).
TRIS/Germany	22/07/2025	Germany notified the European Commission of a draft of a fifth amendment to the Chemicals Act, focusing on fluorinated greenhouse gases (F-gases) and ozone-depleting substances. The proposal abolishes outdated national provisions, clarifies declaration rules for hydrofluorocarbon transfers, tightens bans on pre-filled equipment, and introduces stronger enforcement powers, including provisional bans on unsafe uses and clearer requirements for expertise. The standstill period runs until 23 October 2025, allowing for EU review and comments.
TRIS/Germany	22/07/2025	Germany has submitted a draft amendment via TRIS (Notification 27107) that extends its existing take-back requirement for partially fluorinated hydrocarbons to all fluorinated greenhouse gases, mandating free collection after a transition period. The proposal maintains national emissions limits, supports certification by updating rules on refresher courses and the transition to new certificates, clarifies operator obligations, and preserves German-language information and labelling requirements for equipment using these gases. The submission aligns with Article 10 of the EU F‑Gas Regulation (EU) 2024/573 and includes references to the national certification system and safety exemptions
TRIS/Germany	22/07/2025	Germany notified a draft regulation adapting national chemicals legislation to Regulation (EU) 2024/590 by amending the Chemicals Ozone Layer Regulation and the Chemicals Prohibition Regulation. The proposal deletes national provisions now covered by EU law, removes redundant national documentation duties for the withdrawal of ozone-depleting substances, and streamlines requirements so that recovery, take-back, and leak checks will rely solely on certificates under the Chemicals Climate Protection Regulation. It also abolishes a national derogation for certain asbestos-containing products, as the EU legal basis no longer exists, with the aim of aligning national rules, simplifying obligations, and updating references.
EU Commission	22/07/2025	The European Commission launched a call for evidence under the initiative aiming at reducing the administrative burden in environmental legislation related to waste, products, and industrial emissions—without compromising the legislative objectives of environmental protection. The initiative seeks stakeholder input to streamline permitting, simplify reporting and notification obligations, and ease environmental assessment challenges, as part of a broader Omnibus Regulation under the REFIT programme. The consultation window is open until 10 September 2025
International Court of Justice	23/07/2025	In a landmark advisory opinion on Obligations of States in respect of Climate Change , the International Court of Justice (ICJ) affirmed that all states are legally bound under international law—including treaties like the UNFCCC, the Kyoto Protocol, and the Paris Agreement, as well as customary and human rights law—to take concrete action against climate change, limit global warming to 1.5 °C, curb fossil fuel extraction, and regulate private emitters. The Court underscored that individuals possess a right to a clean and sustainable environment and that states must not only cease harmful actions but also remedy the damage, offer compensation, and ensure accountability—marking a powerful step toward bolstering climate justice and providing legal avenues for redress and enforcement
TRIS/Belgium	24/07/2025	Belgium Notifies Draft Decree on Sampling and Analysis Methods via TRIS Belgium has notified through TRIS a draft Ministerial Decree adopting the updated Compendium for Sampling and Analysis (CMA). Under Flemish legislation, accredited laboratories (VLAREL) must apply the CMA methods, which are revised annually. Although the full compendium is reissued each year, only a limited number of methods are newly added or amended.
EU Commission	24/07/2025	The European Parliament’s Environment, Climate and Food Safety Committee (ENVI) has released its draft report on the European Commission’s proposal to amend the European Climate Law (Regulation (EU) 2021/1119). This law anchors the EU’s binding target of reaching climate neutrality by 2050. The draft report, prepared by rapporteur Ondřej Knotek, sets out Parliament’s preliminary position and introduces a series of proposed amendments to the Commission’s text. These include clarifications, insertions, deletions, and replacements, all framed within the ordinary legislative procedure (first reading). While still at the draft stage, the report signals Parliament’s approach to shaping the updated climate framework, which will guide the EU’s long-term climate strategy.
European Parliament	24/07/2025	On 2 July 2025, the European Commission proposed a binding 2040 climate target of –90% CO₂ emissions compared to 1990 levels, in addition to the existing 2030 (–55%) and 2050 (–100%) goals. In a draft report of the proposal, The European Parliament’s environment committee rejects this plan, urging its withdrawal, warning it would burden industry, harm competitiveness, and add uncertainty without clear benefits. Instead, the report suggests focusing on innovation, adaptation, and resilience, supporting affordable energy and economic stability, and reducing regulatory pressure on businesses while deferring any new binding targets until after the 2030 framework is fully assessed.
UK Parliament	24/07/2025	UK Forced Labour in Supply Chains – Joint Committee on Human Rights Report: The Committee found evidence that goods produced with forced labour are being sold in the UK, despite Government policy and existing domestic legislation. International agreements ratified by the UK have limited effect outside UK jurisdiction, and the UK is now falling behind international partners such as the EU and US, which have stronger due diligence rules and import bans. The Committee heard support from business representatives for mandatory human rights due diligence, noting that the current voluntary approach disadvantages responsible companies. Import bans, use of existing enforcement powers, and stronger provisions in trade agreements are identified as necessary measures. Risks are highlighted in the green energy transition, particularly with critical minerals and polysilicon. Survivors face barriers in UK courts, and the Committee recommends new legislation to introduce mandatory due diligence, an import ban on goods linked to forced labour, and a civil “duty to prevent” for companies.
Taiwan Ministry of Environment	24/07/2025	Taiwan’s Ministry of Environment is actively responding to international CBAM developments by working with relevant agencies and industry associations to design a domestic CBAM trial system focused on cement and steel products. Expert consultations began in April, followed by industry workshops in May and discussions on specific cement categories, and steel coordination is planned for July. The goal is to complete related regulations in the first half of next year and initiate trial reporting of 2025 emissions in the first quarter of 2026, marking the start of Taiwan’s own CBAM pilot year. The Ministry is also engaging with international CBAM developments in the EU, UK, and US, gathering input and preparing responses, and notes strong industry participation in domestic carbon pricing, with around 94% of liable firms submitting reduction plans and many aiming for deeper cuts.
UK Government	28/07/2025	The UK Government has confirmed that engineered greenhouse gas removals (GGRs) will be integrated into the UK Emissions Trading Scheme by 2029, with legislation in place by 2028. The scheme will preserve the existing emissions cap by replacing allowances one-for-one with removal credits, and only projects providing verified carbon storage of at least 200 years will qualify, backed by liability and buffer mechanisms. This ensures market stability while setting rigorous standards for permanence in carbon removal.
European Commission/JRC	28/07/2025	The JRC, in cooperation with Ca’ Foscari University of Venice, the Leibniz Institute for Financial Research SAFE, and WU Wien, is supporting the European Commission’s DG REFORM in a flagship project to develop a new environmental, social and governance (ESG) risk management framework. The project aims to strengthen Member States’ capacity to monitor and address ESG risks in the financial sector, accelerate the EU’s green transition, and raise awareness among consumers and investors. It supports national competent authorities, including financial supervisors and central banks, in implementing EU regulatory frameworks, considering micro and macro-prudential considerations, financial stability impacts, and potential risks for consumers and investors
European Commission	29/07/2025	The European Commission has issued a Call for Evidence as a preparatory step toward a Q1 2026 non-legislative initiative responding to the 2023 “Fur Free Europe” citizens’ petition, which seeks to prohibit the rearing of mink, foxes, raccoon dogs, and chinchillas for fur and/or the placement of such fur products on the EU market. The communication outlines the Commission’s ongoing assessment of environmental, social, economic, and welfare impacts of both the requested bans and alternative measures, including stricter welfare rules and their implications for imports.
European Commission	29/07/2025	In a proposal for a council decision the European Commission proposes that the EU sign the Council of Europe Convention on the Protection of the Environment through Criminal Law. The Convention sets rules on what counts as environmental crime, liability, sanctions, rights, cooperation, and prevention, and is aligned with EU Directive 2024/1203. The EU would sign under its legal powers in the Treaty, with a reservation clarifying that “unlawful” refers to EU and national law. The aim is to keep the Convention consistent with EU law and strengthen international action against environmental crime.
European Central Bank	29/07/2025	The European Central Bank (ECB)’s Governing Council decided to introduce a “climate factor” into the collateral framework to address climate-related transition risks. The value of collateral accepted in Eurosystem refinancing operations is sensitive to climate-change uncertainties. By adjusting the value assigned to eligible assets—specifically marketable assets issued by non‑financial corporations—according to potential exposure to these uncertainties, the measure aims to act as a buffer against adverse climate‑related shocks. Calibration will consider sector‑level data from the Eurosystem’s 2024 climate stress test, the issuer’s CSPP climate score, and asset residual maturity. The measure is scheduled to take effect in the second half of 2026, and will be regularly reviewed by the Governing Council to reflect evolving data availability, models, regulatory developments, and risk-assessment capabilities.
EU Commission	30/07/2025	Regulation (EU) 2025/1561, adopted on 18 July 2025, amends Regulation (EU) 2023/1542 regards obligations of economic operators concerning battery due diligence policies by postponing the enforcement of battery due diligence requirements: the application date is delayed from 18 August 2025 to 18 August 2027. The delay accommodates challenges in the notification of conformity assessment bodies and allows economic operators more time to comply. The Regulation enters into force the day after its publication and applies directly and in full across all Member States.
GRI	30/07/2025	The Global Reporting Initiative (GRI) has released the Textiles and Apparel Sector Standard exposure draft for public comment; feedback may be submitted via the online survey until 28 September 2025. The Standard aims to improve the quality and comparability of sustainability information by setting global best practice for organizations in textile production, apparel, footwear manufacturing, and retail. A 21-member multi-stakeholder Working Group, representing business, civil society, investment institutions, labour, and mediating has been appointed to develop the content between 2024 and 2026. The public comment period will be followed by consideration of feedback and revision of the draft, with the finalized Textiles and Apparel Sector Standard expected to be released in Q2 2026.
European Commission	01/08/2025	The European Commission launched a public consultation and Call for Evidence for the upcoming Circular Economy Act. This step is part of the impact assessment process to gather input from stakeholders and the public on bottlenecks and opportunities in deploying a circular economy. The Act, planned for adoption in 2026, will aim to establish a Single Market for secondary raw materials, boost the supply of high-quality recycled materials, and stimulate demand within the EU. It follows recommendations from the Letta and Draghi reports, the Antwerp and Budapest Declarations, and the European Parliament. The consultation will also align with initiatives such as the Competitiveness Compass, Single Market Strategy, Steel and Metals Action Plan, and recently adopted legislation including the Ecodesign for Sustainable Products Regulation, Packaging and Packaging Waste Regulation, and Critical Raw Materials Act. The consultation is open until 6 November 2025 via the Have Your Say portal.
Republic of France	01/08/2025	From 1 August 2025, the company ecosystem officially takes over from COREPILE as the approved eco-organization for the management of waste from portable batteries and accumulators, under France’s extended producer responsibility rules. Ecosystem will continue all of COREPILE’s commitments, ensuring continuity for producers. This approval is valid from 1 to 18 August 2025 and was published in the Journal officiel on 11 July 2025.
Joint Committee of the European Supervisory Authorities	04/08/2025	The Joint Committee of the European Supervisory Authorities (ESAs) published the Consolidated Q&A on the Sustainable Finance Disclosure Regulation (SFDR) (JC 2023 18). It brings together clarifications from the European Commission on interpreting Union law and answers from the ESAs on practical application. The document explains that these Q&As only clarify existing legislation and do not create new legal rights or obligations.
Republic of France	05/08/2025	The French government has published a decree amending the Environmental Code to comply with Directive (EU) 2019/904 on the reduction of the impact of certain plastic products on the environment (SUP Directive). The decree revises the definitions of “placing on the market” and “producers of single-use plastic products,” as well as the definitions of “fishing gear,” “waste fishing gear,” and “producers of fishing gear.” It establishes extended producer responsibility obligations for producers of fishing gear containing plastic and clarifies producer obligations for single-use plastic products. The provisions enter into force the day after publication in the Journal officiel de la République français.
EU Commission	08/08/2025	The European Commission has launched a Call for Evidence on its Strategic Roadmap for Digitalisation and AI in the Energy Sector, aiming to present the initiative in Q1 2026. The roadmap seeks to accelerate AI deployment, boost research and innovation, integrate data centres sustainably, strengthen transparency and oversight, and enhance governance and cooperation. It highlights challenges such as data gaps, uneven digital uptake, rising energy demand from digital infrastructure, and risks linked to AI in critical energy systems. Public consultation, stakeholder workshops, and a high-level event in Q3 2025 will support the process, with progress tracked through dedicated Commission measures.
Republic of France	11/08/2025	A new decree (n° 2025-804 of 11 August 2025) simplifies several parts of environmental law. It clarifies powers for projects needing environmental authorization (including nuclear reactors), updates mapping rules, allows digital submission of accident and incident reports, and sets the validity of fauna-flora studies. It also establishes a “silence equals rejection” rule for certain ministerial decisions, corrects recent errors in decrees, and takes effect the day after publication, with Article 5 applying from 1 January 2026.
Republic of France	11/08/2025	The Order of 11 August 2025 –NOR : TECP2522186A –approves BATRIBOX as the official eco‑organization responsible for managing EEE waste under France’s extended producer responsibility regime, covering all battery categories; this approval takes effect on 18 August 2025 and remains valid until 31 December 2030. Another Order of 11 August 2025 – NOR : TECP2522193A – approves the company Ecosystem as the eco‑organization responsible for managing all categories of battery waste under France’s extended producer responsibility regime; this approval takes effect on 18 August 2025 and remains valid until 31 December 2030.
TRIS	11/08/2025	Austria has notified the European Commission of its draft Amendment 2025 to the Packaging Classification Ordinance (Verpackungsabgrenzungsverordnung), originally adopted in 2015, which regulates the distinction between household and commercial packaging for the correct allocation of collection and recycling costs. The current regulation, limited until the end of 2025, will be extended for four additional years until the end of 2029. The EU Packaging Regulation (Regulation (EU) 2025/40) allows Member States to maintain this household/commercial distinction after its application date of 12 August 2026.
EU Commission	12/08/2025	The European Commission has published a Guidance Document for Regulation (EU) 2023/1115 on deforestation-free products. This notice provides explanations on the application of the regulation, including definitions such as “placing on the market” and “operators,” the timetable for application (30 December 2025 for large and medium-sized operators and 30 June 2026 for micro- and small operators), as well as elements related to risk assessment, complexity of supply chains, legality, product coverage, and the use of certification in due diligence.
EU Commission	12/08/2025	The European Commission (DG TAXUD) has launched a Call for Evidence for an evaluation of EU rules of origin (RoO), covering the period since the Union Customs Code entered into force in 2016, with the aim of assessing their effectiveness, efficiency, relevance, coherence, and EU added value. The evaluation will focus on the definition of the country of origin, proof mechanisms, and verification systems, and will include public and targeted consultations, interviews, workshops, and an external study. The initiative notes that RoO play a role in various EU policies, including the Carbon Border Adjustment Mechanism, the Net Zero Industry Act, and the Deforestation-free Products Regulation (EU) 2023/1115 (EUDR). The consultation will run in all EU languages, and a summary report will follow its closure, with the evaluation planned to start in Q4 2025.
Republic of France	13/08/2025	The Order  of 13 August 2025 modifies the annex to the Order of 23 November 2022, which outlines the specifications for eco-organisations and individual systems under France’s extended producer responsibility scheme for textiles, footwear, and household linen (TLC). It sets exceptional financial support for sorting operators: at least €49 million in 2025 and €57 million in 2026. Payments in 2025 will be made in three parts, and in 2026 in four parts, based on sorted tonnages, with limits linked to 2024 levels. Some payments depend on cost audits.
UNEP	15/08/2025	The United Nations Environment Programme (UNEP), through the Intergovernmental Negotiating Committee on Plastic Pollution (INC), led global talks in Geneva aimed at finalizing a legally binding treaty on plastic pollution, including marine pollution. After ten days of discussions ending on 15 August 2025, no consensus was reached. More than 2,600 participants, including delegates from 183 countries, nearly 1,000 observers, and 70 ministers, attended the session. The Committee agreed to resume negotiations at a later date, while UNEP Executive Director Inger Andersen stressed that efforts will continue to tackle plastic pollution in groundwater, soil, rivers, oceans, and even human bodies.
European Commission	23/08/2025	The European Commission adopted Delegated Regulation (EU) 2025/1463, which amends Regulation (EU) 2024/1735 by updating the Annex to introduce a refined classification of sub-categories within net-zero technologies and by specifying a detailed list of components considered to be primarily used in their production. The amendment is grounded in a comprehensive supply-chain assessment applying four criteria—specific nature, commercial availability, primary use, and essential character—to identify components that are integral to net-zero technologies. It also adds a new “Final products” column in the Annex to provide clearer context for those components. The updated Annex replaces the previous version and takes legal effect 20 days after publication in the Official Journal.
Financial Reporting Council (FRC)	29/08/2025	The Financial Reporting Council (FRC), serving as secretariat to the UK Sustainability Disclosure Technical Advisory Committee (TAC), is requesting views from stakeholders on the International Sustainability Standards Board (ISSB)’s recently proposed amendments to the Sustainability Accounting Standards Board (SASB) Standards. The TAC is seeking input from users and preparers of sustainability reporting, sectoral/thematic/SASB Standard experts, data providers, and other interested parties, to inform its response to the ISSB’s consultation. Stakeholders are invited to complete a short survey by Friday 29 August 2025

 

 

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