EU climate legislation: what the 2026 rules ask of businesses

Regulations

Marc Munier

CEO

10 min read

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Table of contents

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The EU rewrote much of its sustainability rulebook between December 2025 and April 2026, and its carbon pricing rules moved with it. This guide sets out what each instrument asks for now, and the date attached to it.

Anyone tracking EU climate rules has spent 2026 rechecking work they had already finished. Omnibus I changed who reports under the CSRD. CBAM entered its definitive period. The EUDR application date moved again. Here is where each instrument stands.

Last reviewed: 12 August 2026. Every date and threshold below names the instrument it comes from, and the sources are listed at the foot of the page. Check the consolidated text before you act on a figure, because several of these instruments are still gaining delegated acts.

What changed in EU climate legislation in 2026?

Four changes landed between December 2025 and April 2026. Omnibus I narrowed the scope of the CSRD and the CSDDD. CBAM entered its definitive period on 1 January 2026. The EUDR application date moved to 30 December 2026 for medium-sized and large operators. And the European Climate Law gained a binding 2040 target.

Omnibus I is Directive (EU) 2026/470. The Council adopted the final text on 24 February 2026, it was published in the Official Journal on 26 February 2026, and it entered into force on 18 March 2026. It amends the CSRD and the CSDDD rather than replacing them, so the directives you already know are still the instruments, with new thresholds and new dates.

The European Climate Law now carries a binding interim target of a 90% net reduction in greenhouse gas emissions by 2040, against 1990 levels. Parliament adopted the amendment on 9 February 2026 and the Council gave final approval on 5 March 2026. From 2036, high quality international credits can count towards the target up to 5% of 1990 EU net emissions, which leaves at least 85% of the reduction to be delivered inside the EU.

The same amendment postpones ETS2, the emissions trading system for buildings and road transport, by one year, from 2027 to 2028.

What are Fit for 55 and the EU emissions trading system?

Fit for 55 is the package of laws the EU uses to reach its 2030 target: a cut of at least 55% in greenhouse gas emissions by 2030 against 1990 levels, which the European Climate Law makes a legal obligation. Most of the package is adopted. It covers the emissions trading system, the carbon border adjustment mechanism, member state targets under the effort sharing regulation, land use, CO2 standards for vehicles, renewable energy, energy efficiency and building performance. The energy taxation directive is the main piece still under discussion in the Council.

What does the EU emissions trading system cover?

The EU emissions trading system, the EU ETS, caps emissions from electricity and heat generation, industrial manufacturing and aviation, which together account for about 40% of EU greenhouse gas emissions. Maritime transport came into the system in 2024. Operators surrender allowances against their verified emissions, and the cap falls each year, so emissions from the covered sectors have to be 62% below 2005 levels by 2030. Free allocation for aviation was removed as of 2026.

What is ETS2, and when does it start?

ETS2 is a separate emissions trading system covering fuel combustion in buildings, road transport and small industry outside the main system. The regulated parties are fuel suppliers rather than households or drivers, so most companies meet ETS2 through fuel and heating prices rather than through a surrender obligation of their own. It becomes fully operational in 2028, a year later than first set, and its cap is designed to bring emissions in those sectors 42% below 2005 levels by 2030.

Which EU rules apply, and from when?

Five instruments carry dates that matter to a company with a supply chain in or into the EU. These are the dates in force after the 2026 amendments.

CBAM, definitive period from 1 January 2026. Importers of covered goods report embedded emissions for 2026 imports. Certificate sales start in February 2027, priced on the quarterly average of EU ETS auction clearing prices for 2026, and the first declaration and surrender covering 2026 imports is due by 30 September 2027.
EUDR, 30 December 2026. The regulation applies to large and medium-sized operators and traders from that date, and to micro and small operators from 30 June 2027, except those already covered by the EU timber regulation, who apply it from 30 December 2026. The Council signed off the targeted revision on 18 December 2025. A delegated act published on 13 July 2026 changed the product list, and the products it adds are covered from 30 December 2027.
CSRD, financial years starting on or after 1 January 2027. The amended scope applies from that point, with first reports in 2028. The Commission adopted the simplified ESRS delegated act on 3 July 2026, which applies to financial years beginning on or after 1 January 2027 and could be applied early to financial years beginning in 2026. It takes effect once the Parliament and Council scrutiny period has run.
ETS2, 2028. Carbon pricing for fuels used in buildings, road transport and small industry, postponed by one year from 2027.
CSDDD, 26 July 2029. Member states must transpose the amended directive by 26 July 2028, and companies in scope apply the rules from 26 July 2029.

One transitional point is easy to miss. Companies that reported under the CSRD for financial year 2024 but fall outside the new scope may be exempted for financial years beginning between January 2025 and December 2026. That exemption is left to each member state, so a first wave company below the new thresholds should check its own national position rather than assume the exemption applies.

Who is in scope of each instrument?

Scope is set per instrument, and the 2026 amendments moved two of the largest thresholds a long way. Company size, sector and where you import decide which of these you read first.

CSRD. Large undertakings with more than 1,000 employees and net turnover above 450 million euros, for financial years starting on or after 1 January 2027. Non-EU parent companies with net turnover in the EU above 450 million euros are also in scope, through their EU subsidiaries and branches that generate more than 200 million euros of turnover in the EU.
CSDDD. EU companies with more than 5,000 employees and turnover above 1.5 billion euros, and non-EU companies with EU turnover above 1.5 billion euros.
EU ETS. Operators of covered installations, aircraft operators and shipping companies. The surrender obligation sits with the operator, so a company outside those sectors meets the EU ETS as a carbon cost inside the price of what it buys rather than as a compliance duty of its own.
CBAM. Importers of covered goods into the EU. Regulation (EU) 2025/2083 introduced a de minimis of 50 tonnes of Annex I goods per importer per calendar year, covering iron and steel, aluminium, fertilisers and cement. Hydrogen and electricity sit outside that exemption. The Council agreed its position on a further revision on 12 June 2026, which would extend CBAM to selected downstream iron, steel and aluminium products and bring pre-consumer metal scrap into scope. That text is still in negotiation with Parliament, so the list of covered goods is still moving.
EUDR. Operators and traders placing listed commodities and derived products on the EU market, or exporting them, with due diligence statements that carry the geolocation of the plots of land where the commodities were produced.
EU Taxonomy and SFDR. Financial market participants, financial advisers, and the companies whose activities they classify. The Commission adopted a delegated act amending the taxonomy disclosures, climate and environmental delegated acts on 4 July 2025, and it applies from 1 January 2026. The SFDR is being rewritten separately: the Council agreed its negotiating position on 24 June 2026, and the text still has to go through Parliament and trilogue. The reporting threshold for taxonomy disclosures is set in Article 8 of Regulation (EU) 2020/852, which fixes who has to report by reference to the sustainability reporting articles of Directive 2013/34/EU, the articles Omnibus I amended through Directive (EU) 2026/470. This page carries no figure for it, because the two texts have to be read together: take the threshold from the consolidated text of Regulation (EU) 2020/852 and of Directive 2013/34/EU as amended, rather than from a summary.

Requirements overlap, which is the useful part. Emissions data gathered for a CSRD disclosure supports CBAM reporting on embedded emissions and due diligence work under the CSDDD, because all three ask you to know something specific about the organisations you buy from.

What should you do next?

Three pieces of work carry across every instrument on this page, and none of them waits on the delegated acts.

Settle the scope question in writing.
- Test the company against the amended CSRD and CSDDD thresholds, and against the CBAM de minimis if you import.
- Record the test, the date and the source you used, because these thresholds have moved once already.
- Check your member state position on the transitional exemption if you reported for financial year 2024.
Get the data process running before the standards are final.
- Decide where supplier and portfolio company emissions data will live.
- Agree who signs off a figure, and how a change to it is recorded.
- Keep the source of every figure, not only the number.
Map the supply chain you actually buy from.
- Rank organisations by spend and by exposure to CBAM goods and EUDR commodities.
- Find where you hold no data at all, and say so rather than filling the gap with an average.
- Set a date to review the map, because scope follows your supplier base as much as it follows the law.

How do you make the numbers auditable?

Whoever checks your report will ask where each figure came from and what changed since last year. A third-party auditor asks the same question, and it is answered by provenance rather than by effort. Spend-based averages applied across a whole supplier list will not answer it on their own.

DitchCarbon provides verified emissions data for over 2 million organisations, so procurement, sustainability and finance teams can measure and act on supply chain and portfolio emissions from one source. Every figure carries its source and change history, and organisations are matched by entity resolution against DUNS, LEI and ISIN identifiers, so a name in your ledger resolves to a company an auditor can trace.

The evidence behind that is published. The DitchCarbon Portal calculator is verified to ISO 14064-3, limited assurance, by UL Solutions, renewed annually, which is what makes audit-ready reporting a checkable claim rather than a description. The emission factor methodology for spend-based Scope 3 categories 1 and 2 was independently assessed by Globus Thenken in August 2025. Both documents are downloads on the DitchCarbon trust centre.

Reporting is the floor rather than the point. The same organisation-level data that supports a disclosure also shows which categories and which suppliers drive the footprint, which is where a reduction plan starts.

For one instrument in more depth, read the guide to the CSRD or the CBAM guide for importers. If you report on both sides of the Channel, the guide to UK climate legislation covers the parallel regime.

See what this looks like on your own supplier list

Send the supplier list you already have and we will show the coverage, the gaps and the provenance behind each figure, so you get to numbers you can defend within 2 weeks. See how emissions reporting works with DitchCarbon.

If you are on the other side of the request, and a customer or an investor has asked you for emissions data to support their own EU reporting, you can answer once and reuse it. Claim your company profile.