On July 4, 2025, the European Commission adopted a set of measures to simplify the application of the EU Taxonomy, the EU’s classification system of sustainable economic activities and investments. The changes are intended to reduce the administrative burden for EU companies, thus enhancing EU competitiveness while preserving core climate and environmental goals.
The main simplification measures include the following:
- Financial and non-financial companies are exempt from assessing Taxonomy-eligibility and alignment for economic activities that are not financially material for their business. For non-financial companies, activities are considered non-material if they account for less than 10% of a company’s total revenue, capital expenditure, or operational expenditure.
- Non-financial companies are exempt from assessing Taxonomy alignment for their entire operational expenditure when it is considered non-material for their business model.
- Taxonomy reporting templates are streamlined by cutting the number of reported data points by 64% for non-financial companies and by 89% for financial companies.
- The criteria for “do no significant harm” to pollution prevention and control related to the use and presence of chemicals are simplified.
The Delegated Act will now be transmitted to the European Parliament and the Council for their scrutiny. The changes will apply once the four-month scrutiny period, which can be prolonged by an additional two months, is over. The simplification measures laid out in this Delegated Act will apply from January 1, 2026 and will cover the 2025 financial year. However, undertakings are given the option to apply the measures starting with the 2026 financial year if they find this more convenient.
This article originally appeared on inc.nutfruit.org.
