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By Antonia Alomar, our Public Policy Expert.

The European Commission has announced a legislative proposal, known as an omnibus package, modifying the scope and requirements of three of the main EU’s Green Deal directives. Through simplification, the European Commission wants to increase competitiveness. Large tourism companies will benefit from streamlined reporting requirements and reduced administrative burdens, but many believe this can be at the expense of compromising green growth.

How Will This Affect Destinations and Events?

The first omnibus package was announced on 26th February by the European Commission delivered as expected and more.

The Commission wants to save €6.3 billion in annual administrative costs by simplifying three of the most important sustainability directives:

1. Corporate Sustainability Reporting Directive (CSRD),
2. The Corporate Sustainability Due Diligence Directive (CSDDD) and
3. The EU Taxonomy, a classification system that defines criteria for net zero-aligned economic activities

To achieve this, principal changes have been proposed:

What Does This Mean for Sustainability in General?

While many stakeholders express support for the idea of simplifying bureaucratic processes and reducing red tape, these new changes will not just simplify legislation but can lead to weakening of essential regulations.

Emphasising sustainability regulations as cost drivers that undercut growth and competitiveness underpins a shortsighted perspective; sustainability is a long-term value that can deliver growth and increase competitiveness, if approached appropriately. A delicate balance must be struck between making the regulatory environment more manageable and ensuring that it continues to serve its intended purpose of safeguarding public interests and maintaining industry standards.

What Does This Mean for Tourism?

The vast majority of the approximately 2.3 million businesses that are part of EU´s tourism industry are SMEs. With this proposal, SMEs that previously met the criteria under CSRD will no longer have to comply with reporting by 2026. Although most changes are unlikely to directly affect smaller companies, SMEs – particularly DMOs – must recognise that they could still be impacted as larger entities within their supply chain will need to comply (and thereby require them to supply data for their reporting).

For the travel sector, it will most likely mean that airlines, large hotel chains, and tour operators only will be subject to this financial reporting. The taxonomy will also only apply to these large companies.

Next Steps

The proposals will now be submitted to the European Parliament and the Council, and proposed changes will only come into force once the co-legislators have reached an agreement which will likely be at end of 2025 or in 2026.

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