What’s Next in EU Nature Regulation?

The EC Competitiveness Compass  

In January 2025 the European Commission (EC) presented the Competitiveness Compass - 3 transformational imperatives to boost Europe’s competitiveness over the next 5 years. To help shed light on what these changes mean for stakeholders in the built environment, PRF spoke to a nature conservation policy representative from the European Commission. This article outlines some key considerations for construction sector players navigating the EU nature regulation pipeline.

The Compass includes a “joint roadmap for decarbonisation and competitiveness” which amends Europe’s Climate Law. It therefore affects all European Nature Laws outlined in this article series so far. This is manifested in the Omnibus proposal, which aims to simplify companies’ sustainability reporting, due diligence, and taxonomy obligations. The Compass aims to reduce administrative burdens by at least 25% for firms and 35% for SMEs. (EU Compass Press Release)

Omnibus 

The EU Taxonomy, Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) collectively oblige organisations across the construction sector to provide detailed information on their environmental impacts. Many entities in the sector are not directly subject to these laws, with 95% of Europe’s construction sector made up of SMEs and micro-enterprises. ​However, because these entities supply to companies that are in-scope, they face pressure from their upstream contractual partners. 

In their submission reports to the EC, both the Construction Industry Federation (FIEC) and the European Builders’ Confederation (EBC) advocated for the introduction of the Omnibus simplification package, citing administrative and bureaucratic burdens and undue complexity. The FIEC went one step further, appealing for simplification of the Carbon Border Adjustment Mechanism (CBAM), the Deforestation Regulation (EUDR), and the Water Framework Directive (WFD). 

As the Omnibus Proposal has not as yet been passed into European Law, the construction sector is still bound by the CSDDD, CSRD and Taxonomy until further notice. An overview of the proposed changes to each of the existing laws can be found on the EC website. 

The Climate Adaptation Plan 2025

In addition to Omnibus, the Compass promises to deliver a European Climate Adaptation Plan this year to clarify how climate resilience will be integrated into urban planning, deploying nature-based solutions, developing nature credits and adaptation in agriculture while preserving food security. These measures are taken to mitigate European society “from the worst of natural calamities such as floods, droughts, wildfires and storms that compromise supply chains and production sites.” (EC Competitiveness Compass) Construction sector players would be well advised to keep abreast of developments to the Climate Adaptation Plan. Follow PRF on LinkedIn for relevant updates.   

Environmental and Economic Competition

The Compass also points to the continued and expanded implementation of the Critical Raw Materials Act 2024 to promote domestic production, stockpiling and diversification. The Act currently outlines domestic 2030 benchmarks along the strategic raw materials value chain and for the diversification of the EU supplies. 

To ensure the EU can achieve targets, the following domestic benchmarks are set out for 2030:

• Union extraction capacity is able to extract the ores, minerals or concentrates needed to produce at least 10% of the Union's annual consumption of strategic raw materials;

• Union processing capacity is able to produce at least 40% of the Union's annual consumption of strategic raw materials;

• Union recycling capacity is able to produce at least 15% of the Union's annual consumption of strategic raw materials;

• no more than 65% of the EU’s annual consumption of strategic raw material from a single third country.

As Europe’s tolerance for climate impact tightens, the Commission anticipate the risk of competitors from outside the EU claiming an unfair advantage due to lenient local nature regulations. ‘Unfair competition and levelling the playing field’ – a section within the compass – tackles this potential head on, reinforcing existing policy tools like trade defence instruments and the Foreign Subsidies Regulation. 

To stay up to date on how the Competitiveness Compass will impact the construction sector, follow PRF on Linkedin.