Europe’s Green Balancing Act: Supporting Industry While Delaying Sustainability Reforms

The European Union is navigating a delicate balance between accelerating its green transition and maintaining industrial competitiveness. In two pivotal decisions announced during the April 2025 plenary sessions, Members of the European Parliament (MEPs) approved a strategic roadmap to support energy-intensive industries and agreed to delay the application of key due diligence and sustainability reporting rules.

A Boost for Energy-Intensive Industries

Energy-intensive sectors such as steel, chemicals, cement, paper, and glass — which account for millions of jobs and underpin the EU’s strategic autonomy — have received renewed backing from the European Parliament. A resolution adopted by show of hands calls for robust support to help these industries decarbonize while remaining globally competitive.

The roadmap outlines several critical challenges: volatile fossil fuel prices, high energy costs compared to global competitors, fragmented regulatory frameworks, and limited access to affordable financing. The Parliament stresses that overcoming these hurdles is essential to achieving a cost-effective, technology-neutral transition without risking industrial decline.

Key recommendations include:

• Accelerating clean energy permitting and implementing electricity market reforms.
• Improving energy system integration and investing in grid infrastructure.
• Advancing the review of short-term energy markets to 2025 to explore alternative market designs.
• Enhancing access to critical and secondary raw materials to foster private investment.
• Streamlining regulatory burdens for small and medium-sized enterprises.
• Implementing the Carbon Border Adjustment Mechanism (CBAM) to counter unfair international competition.

Giorgio Gori (S&D, Italy), the lead MEP behind the resolution, emphasized the urgency:

"We have no time to lose: we need to act to ensure European industry can endure and protect its jobs. Technological innovation requires substantial investment, which the EU has a responsibility to support with public resources."

Sustainability Regulations Postponed for Industry Readiness

In a parallel move focused on regulatory simplification, the European Parliament voted decisively — 531 in favor, 69 against — to delay the application of sweeping due diligence and sustainability reporting rules. The extensions are designed to give large companies and member states more time to prepare for compliance, amid concerns over regulatory overload and implementation challenges.

The postponed rules, part of the Commission’s broader “Omnibus I” simplification package, include:

• Corporate due diligence requirements: EU-based companies with over 5,000 employees and €1.5 billion turnover (and equivalent non-EU entities) will now comply starting in 2028, a year later than originally planned.
• Sustainability reporting directives: Large companies (over 250 employees) must disclose their environmental and social impacts beginning in 2028 for the previous year. Listed SMEs will follow in 2029.

This phased approach aligns with broader efforts to ensure that Europe’s green transition is both feasible and equitable, particularly for businesses grappling with overlapping environmental and economic pressures.

Strategic Cohesion or Regulatory Contradiction?

The two decisions — supporting heavy industry’s decarbonization while slowing regulatory implementation — underscore the EU’s dual priorities: driving climate leadership while safeguarding economic stability. However, they also reflect the tension between ambition and practicality that defines much of Europe’s environmental policymaking.

While environmental advocates may view the postponement of due diligence rules as a setback, industry groups and policymakers argue it’s a pragmatic step to ensure the transition remains sustainable in every sense — economically, socially, and environmentally.