Sustainability Agenda
3–22 July 2026
6 updates
Revised ESRS Standards Approved
The European Commission has adopted the revised European Sustainability Reporting Standards (ESRS), together with a voluntary reporting standard for smaller companies outside the scope of the CSRD. The update aims to simplify reporting requirements, remove less relevant data points, prioritize quantitative disclosures, and clarify the application of the materiality principle.
What Does It Mean?
The revision does not mean that sustainability reporting is being eliminated or becoming less important. Instead, it marks a shift toward reporting fewer but more meaningful, comparable, and verifiable disclosures.
For companies, this increases the importance of robust double materiality assessments, stronger links between reported information and corporate strategy, and proportionate data requests across the value chain.
For small and medium-sized enterprises, the voluntary standard provides a more structured and manageable framework for responding to sustainability information requests from large companies and financial institutions.
CBAM Certificate Sales and Buy-Back Draft Rules Published
The European Commission has published a draft regulation setting out the operational rules for the sale and buy-back of CBAM certificates and opened it for public consultation.
The draft establishes the procedures for purchasing CBAM certificates, payment methods, the buy-back of excess certificates, and the operation of the Common Central Platform. According to the proposal, certificate sales are expected to begin on 1 February 2027. It also introduces a platform fee for certificate transactions and limits buy-back requests to one application per year.
The public consultation will remain open until 6 August 2026.
What Does It Mean?
The draft regulation provides greater certainty on how the financial phase of CBAM will operate once certificate trading begins. It clarifies not only how certificates will be purchased and managed, but also how excess certificates can be returned.
For EU importers, the proposal highlights the need for more effective certificate purchasing and cash-flow planning. For exporters, particularly those supplying CBAM-covered goods, the importance of providing accurate and verified embedded emissions data becomes even greater, helping importers avoid unnecessary certificate purchases and additional compliance costs.
As the regulation is currently in draft form, stakeholders have the opportunity to submit feedback before the rules are finalized.
CBAM Q2 2026 Certificate Price Announced
The European Commission has announced the CBAM certificate price for the second quarter of 2026. The certificate price has been set at €75.28 per tonne of CO₂ equivalent.
Each quarterly price determined for 2026 will apply to the CBAM certificates corresponding to the embedded emissions of CBAM-covered goods imported into the European Union during the relevant quarter.
Certificate sales are expected to begin in February 2027 through the Common Central Platform.
What Does It Mean?
The quarterly certificate price provides companies with a clearer basis for estimating the potential carbon cost associated with CBAM-covered imports.
For EU importers, the announced price will support certificate purchasing, cash-flow planning, and compliance cost forecasting. For exporters, particularly those in carbon-intensive sectors, it further increases the importance of accurately calculating and verifying embedded emissions.
Lower and more reliable product-level emissions data may help reduce the number of certificates required and improve the competitiveness of exported products in the EU market.
EUDR Product Scope and Digital Updates Published.
The European Commission has introduced new measures to facilitate the implementation of the EU Deforestation Regulation (EUDR) by updating the product scope and enhancing the functionality of the EUDR Information System.
The Commission adopted a Delegated Regulation revising the list of products covered under Annex I and an Implementing Regulation establishing the technical rules for the EUDR Information System. These updates clarify the scope of the Regulation while defining how due diligence statements will be submitted electronically.
Among the changes, hides, skins and certain leather products, retreaded tyres, soybeans intended for sowing, selected vulcanised rubber products, conveyor and transmission belts, and aircraft and motor vehicle seats have been excluded from the scope. Meanwhile, soluble coffee, certain palm oil derivatives, and frozen bovine tongues have been added.
The Commission also enhanced the EUDR Information System by introducing simplified due diligence procedures for micro and small enterprises and improving API functionalities to enable more efficient data exchange between companies’ internal systems and the EUDR platform.
What Does It Mean?
These updates provide greater clarity on which products are subject to EUDR requirements while improving the digital infrastructure that companies will use to demonstrate compliance.
Businesses should review whether their products have been added to or removed from the Regulation’s scope and prepare their due diligence processes accordingly. Companies developing digital compliance solutions will also benefit from improved API capabilities, enabling more efficient integration with internal traceability and reporting systems.
The updated timeline remains unchanged: EUDR obligations will apply from 30 December 2026 for large and medium-sized companies (and micro/small operators under the EU Timber Regulation) and from 30 June 2027 for all other micro and small enterprises.
EU ETS Revision Proposal Published
The European Commission has published a targeted proposal to revise the EU Emissions Trading System (EU ETS) with the aim of strengthening industrial competitiveness and supporting cost-effective decarbonisation.
The proposal introduces significant changes to the free allocation and benchmark systems, particularly for sectors covered by CBAM. It includes measures to increase free allocation levels for the 2026–2030 period, slow the phase-out of free allowances in CBAM sectors, and extend the transition period until 2038.
The proposal also sets out the framework for updating benchmark values for the 2031–2035 and 2036–2040 periods, while retaining the core principles of the existing benchmark methodology.
What Does It Mean?
The proposal indicates a more gradual transition from free allocation under the EU ETS to full carbon-cost exposure under CBAM.
For EU producers, this may provide additional short-term protection against carbon leakage and reduce the immediate cost impact of decarbonisation. For exporters to the EU, however, CBAM obligations remain relevant. The slower phase-out of free allocation may affect the pace at which CBAM financial liabilities increase, but it does not remove the need for accurate embedded-emissions calculations and verified product-level data.
Companies in steel, aluminium, cement, fertiliser, hydrogen and other CBAM-covered sectors should therefore reassess their medium-term carbon-cost scenarios, benchmark exposure and decarbonisation plans in light of the proposed changes. The proposal is not yet final and will proceed through the EU legislative process.
EU Signals Flexibility on Methane Rules for Imported Energy
The European Union is reportedly considering a more flexible approach to the implementation of methane requirements for imported oil, natural gas, and coal.
Under the approach being discussed, companies’ obligations relating to methane emissions measurement, reporting, traceability, and management would remain in place. However, the application of certain high administrative penalties could be delayed until 2030. The reported approach also appears to place greater emphasis on energy security and continuity of supply.
At this stage, the development does not constitute an adopted legislative amendment or a final European Commission proposal.
What Does It Mean?
The development indicates that the EU may be seeking a more gradual balance between its methane-reduction objectives and energy supply security.
For companies operating across oil and gas supply chains, methane measurement, traceability, supplier data, and reporting requirements will remain relevant. A possible delay in enforcement or penalties may provide additional preparation time, but it would not remove the need to establish reliable monitoring, reporting, and verification systems.
Companies should therefore continue strengthening supplier engagement, methane data collection, contractual data requirements, and emissions verification processes while monitoring further regulatory developments.