EU Opens Consultation on Taxonomy Delegated Acts

Simplifying EU Taxonomy Reporting

The proposed amendments focus on:

Reducing reporting complexity by consolidating disclosure templates.Introducing financial materiality thresholds to exempt non-material activities from assessment.Revising technical screening criteria, particularly in areas like chemical use and pollution prevention, to enhance feasibility.

Manufacturers, especially those in high-impact industries such as chemicals, automotive, and electronics, should assess how these changes may alter their reporting obligations.

Key Changes in Chemical and Pollution Regulations

One of the most significant updates affects the "Do No Significant Harm" (DNSH) criteria, which determine whether an economic activity aligns with EU sustainability goals.

The amendments propose simplifying compliance rules for manufacturers using chemicals listed under REACH (Regulation (EC) No 1907/2006) and the Classification, Labelling and Packaging (CLP) Regulation.Companies may be exempt from compliance assessments for certain non-material activities that fall under the 10% financial materiality threshold.The amendments may also reduce reporting obligations related to chemicals in solar PV, batteries, and heat pump manufacturing, supporting the EU’s green transition strategy.

Impact on Manufacturers and the Supply Chain

1. Compliance Costs and Reporting Burden

Manufacturers may save time and resources due to simplified disclosure templates and clearer materiality thresholds. However, companies dealing with chemicals must still ensure alignment with EU environmental objectives.

2. Competitive Advantage for Sustainable Businesses

Streamlined reporting may help sustainable manufacturers attract more green finance and investment, as financial institutions increasingly rely on taxonomy-aligned data.

3. Potential Regulatory Risks

Failure to provide accurate sustainability disclosures may result in compliance risks and reputational damage. Companies must evaluate how these amendments impact their existing environmental reporting strategies.

What’s Next? How to Participate

Businesses and stakeholders can submit feedback until 26 March 2025 through the European Commission’s Have Your Say platform. The Commission will review the input before finalising the amendments in Q2 2025.

Manufacturers should assess their reporting frameworks and provide insights to shape policies that balance regulatory compliance with economic feasibility.