From ‘Green’ to ‘Grey’: EU Relaxes Environmental Law

In 2025, the European Union has continued to demonstrate the fragility of its strategies regarding sustainability-related regulation, with decisions that have ended up watering down a legislative agenda that was intended to be revolutionary and that, with the passage of time, is generating more and more confusion among companies and consumers.

In February, the European Union approved what was to be the first of the Omnibus packages to simplify corporate sustainability regulation, which in practice exempts 80% of companies from Corporate Sustainability Reporting (CSR) obligations, such as the publication of sustainability reports. In addition, following the new European stop-the-clock principle, it establishes a two-year extension for the entry into force of the Csrd for large companies and gives an extra year to comply with the obligations on their supply chain contemplated in the Due Diligence.

Europe was thus following the recommendations of the so-called Draghi Report, presented in 2024 by the former president of the European Central Bank, which warned that excessive bureaucracy could be limiting economic growth and the ability of European companies to compete on a global scale.

However, the European trademark is legislative muddle, and the very passage of the Omnibus law has not been without its ups and downs. In October, the European Parliament voted against the legislative package, which was finally approved in November in a second round.

The final green light given to the measure by the European Parliament also had a historic component, as it was the first occasion on which the European People’s Party (EPP) set aside the traditional majority of pro-European parties and voted together with the ultra-conservative and extreme right-wing groups.

Another important brake on the European sustainability initiative came last June, when the European Commission announced its decision to withdraw its legislative proposal to combat the possibility of companies making misleading claims about the environmental qualities of their products.

The Commission’s announcement to withdraw the Green Claims Directive, which was intended to combat greenwashing, provoked disquiet.

“In the current context, the Commission intends to withdraw the Green Claims Directive,“ Maciej Berestecki, EU Environment spokesman, told a press conference. This legislative proposal was presented in September 2023 and focused on explicit environmental claims, i.e. those expressed in text form or contained on an environmental label, and on environmental labels.

The objective of the standard was to establish minimum requirements for the substantiation, communication and verification of environmental claims and labels. In practice, it was intended to ensure that companies’ environmental claims were supported by widely recognized scientific evidence, were meaningful in the product life cycle and were based on accurate primary or secondary information.

The halting of the Green Claims Directive will mean that greenwashing will only be regulated by the Consumer Empowerment Directive, which aims to prevent unfair commercial practices using the banner of sustainability. In the fashion industry, the Environmental Claims Directive was awaited with great interest, as it would allow for common criteria on the environmental sustainability of a product and establish a common language that would offer certainty to both consumers and the companies themselves.

The Royal Decree that will regulate EPR in Spain received more than a thousand claims

Common criteria and certifiers approved by the European Union were, according to many experts and those responsible for sustainability in fashion companies, a necessity for progress in the transformation of the sector. Hence, many agents were eagerly awaiting the approval of a directive that would make it possible to standardize the progress made in this regard over the years by many companies.

Another legislative field in which the sector is awaiting the European Union’s approval is that of eco-design. In 2022, the European Commission published the European Union Strategy for Sustainable and Circular Textile Products, and in mid-2024 it gave the green light to the Ecodesign Regulation, which aims to ensure that products marketed in the European Union meet minimum requirements for preferential environmental performance, including durability.

The regulation empowers the European Commission to establish these minimum requirements, and it is up to the EU government to provide the details that will guide the so-called ecodesign and ecomodulations: variables according to which companies that design in a more sustainable way will have reductions in the payments of the extended producer responsibility systems.

The effective application of this regulation, which, unlike the directives, will come into force automatically and will not have to be transposed into each national legislation of the European Union, will be carried out by means of delegated acts. These acts will be carried out on a product-by-product basis or for groups of similar products and will be based on comprehensive preparatory studies and impact assessments. Clothing and footwear are among the priority products for the commission which, in the case of clothing, has set 2027 as the target year for the adoption of the regulation.