The EU Commission plans to delay the entry into force of the Supply Chain Act and implement it in a weakened form. This decision follows considerable criticism from the business community. Adjustments to CO₂ taxes and sustainability reports are also planned.
Delay and relaxation decided
The Commission announced that it would postpone the initial deadlines for implementing the Supply Chain Act by one year to 2028. At the same time, simplified requirements are intended to ease the burden on companies and, according to EU estimates, enable savings of up to €320 million per year. It was originally planned that member states would transpose the new regulations into national law within just over two years. The law, which was passed just last year, aims to improve human rights protection worldwide. Large companies will in future be held liable for violations such as child or forced labor if they profit from them.
Reaction to resistance from the business community
Companies had criticized the Supply Chain Act as an excessive bureaucratic burden that threatened their competitiveness. The Commission therefore proposes postponing the implementation date to June 26, 2028. The law would then enter into full force one year later.
A significant change concerns the scope of audits: Companies will no longer be responsible for the entire supply chain, but only for direct suppliers. Furthermore, proof of compliance with the regulations will no longer be required annually, but only every five years. EU-wide civil liability for violations will also be limited. Commission President Ursula von der Leyen announced plans to reduce excessive regulation – a plan that still requires the approval of EU member states and the European Parliament.
Further adjustments to sustainability reports and CO₂ taxes
In addition to postponing the Supply Chain Act, the Commission plans to revise the sustainability reporting rules. Their introduction will be delayed by two years, and approximately 80 percent of the companies currently covered could be exempted from the requirement.
In addition, numerous companies are to be exempted from the planned CO₂ tax on imported goods. According to the Commission's assessment, their emissions are minimal. The regulation will apply to companies that import fewer than 50 tons of steel, aluminum, cement, or fertilizers into the EU.