How the EU is making rules simpler for business
Parliament is creating the conditions for stable and sustainable growth: by simplifying rules, boosting the single market, and supporting small businesses.
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The EU is working to make its legislation more efficient and ease the administrative burden, especially for small and medium-sized enterprises (SMEs). This should help EU companies in a wide range of sectors to stay competitive, invest and create jobs.
A number of “omnibus” legislative packages are being considered by Parliament to boost defence, agriculture, investment capacity, the single market and the digital transition. Several of these simplification measures were finalised in late 2025.
Parliament called for simpler EU rules after the European elections in 2024. Roberta Metsola, President of the European Parliament, told EU leaders on 1 October 2025 that the EU’s simplification initiative means more jobs, more stability and more security.
“The European Parliament is committed to making life better, fairer and easier for industry, for families, for farmers. At a time when too often the world feels like it is on fire, we want to make sure Europe remains the best and safest place to be.”
Parliament has reacted swiftly to proposals from the European Commission on making rules simpler. Here is a snapshot.
Exempting small importers from the EU’s carbon leakage instrument
To reduce the risk of companies shifting carbon-intensive activities outside of the EU, the EU adopted the EU’s carbon leakage instrument, the Carbon Border Adjustment Mechanism (CBAM), in 2023 for sectors including cement, iron, steel, aluminium, fertilisers and electricity. Under the instrument, a carbon levy should be charged on imports from countries with less ambitious carbon emission rules than the EU.
The rules were adapted in 2025 to reduce the administrative burden on small businesses and boost their competitiveness.
90% of importers will now be spared from EU carbon border rules. Climate goals are nonetheless maintained as 99% of CO2 emissions from iron, steel, aluminium and cement imports will still be covered by the rules.
On 10 September, Parliament adopted the simplification of CBAM.
Boosting investments
The Invest EU programme is the EU’s main instrument for channelling public and private investment. Simplifying it aims to bring an additional €50 billion in investments in key areas such as clean tech, digitalisation and sustainable infrastructure.
The amended rules will inject fresh momentum into Europe’s economy and support small businesses and innovators across the EU. MEPs adopted the changes on 26 November 2025.
Less paperwork for farmers
The burden on farmers in terms of administration and paperwork has increased in recent years. According to the European Commission, simpler rules could lead to annual savings of up to €1.6 billion for farmers and more than €200 million for EU countries. There would be further flexibility and less administrative work for farmers who comply with EU agricultural rules.
In December 2025, Parliament formally adopted an agreement with EU governments that limits the number of official on-the-spot checks to one. It also increases annual financial support for small farmers, and offers them a higher one-off payment of up to €75,000 to help develop their businesses.
More time for battery producers to adapt their business
Batteries are a key component for strategic products such as electric cars and the EU has adopted rules to make them more sustainable. However, EU battery producers need more time to adapt their supply chains.
Parliament has adopted rules to postpone by two years - until August 2027 - the date when due diligence obligations kick in.
Sustainability rules for fewer companies
The EU has rules that require companies to prevent and minimise their negative impact on people and the planet, and to report on their social and environmental footprint. Because of concerns that this may pose a large administrative burden, especially on smaller businesses, Parliament backed a proposal to reduce the number of companies required to carry out due diligence duties, and to simplify and reduce reporting requirements across sectors.
Parliament approved a provisional agreement with EU governments in December 2025 narrowing the scope of the rules significantly. Due diligence obligations will be limited to very large corporations with more than 5,000 employees and net annual turnover of over €1.5 billion; this will apply from June 2029. Only companies with more than 1,000 employees and a net annual turnover above €450 million will have to comply with the sustainability reporting rules.
The updated legislative text also made sure that smaller companies would not have to perform due diligence or sustainability reporting on behalf of their bigger business partners. The Commission will set up a digital portal with standardised templates to support compliance.
Defence
This change will facilitate and boost defence investments and conditions for the defence industry, and simplify security and defence procurement.
In December 2025, Parliament backed modifications to major EU funding programmes to make it easier to finance defence-related projects. The changes aim to offer more support for SMEs and start-ups in the defence sector and strengthen Europe’s defence industrial base.
Simpler and more transparent EU rules on chemicals
These changes would streamline the safety assessments of chemicals across EU legislation by making data related to chemicals more accessible and available. A crucial new tool will be the creation of a common EU data platform which will increase access to key chemical safety information.
MEPs adopted the updated rules on 21 October agreed informally with EU governments. They also agreed to delay rules on classification, labelling and packaging of chemicals.
Deforestation
The EU’s deforestation law was adopted in 2023 to ensure products sold in the EU such as coffee, palm oil, soya and wood are not sourced from deforested land.
Parliament adopted targeted changes in December 2025 to make it easier for companies, as well as both EU- and non-EU countries, to implement the law. Companies would have an additional year to comply with the rules and due diligence requirements would be simpler.
