EU’s Simplification Drive: Relief for Industry or Just Repackaged Red Tape?

The EU’s much-publicised “simplification revolution” promises to cut red tape and reduce compliance costs for businesses. On paper, the targets look impressive: a 25% reduction in administrative burdens, 35% relief for SMEs, and an estimated €37.5 billion in savings. For industry, this could mean less time spent on reporting and more resources freed for innovation, investment, and growth. Yet, while the ambition is clear, the reality is more complicated. Companies across sectors are cautiously optimistic but wary of whether the omnibus packages will deliver meaningful change or simply rearrange existing obligations.

Take sustainability rules. The first omnibus aims to streamline due diligence, sustainability reporting, and the carbon border adjustment mechanism (CBAM). While simplification is welcome, many businesses fear that “lighter” does not necessarily mean “simpler.” Firms still face fragmented national interpretations, shifting timelines, and the looming risk of overlapping global standards.

The investment package also raises questions. Simplified access to EU funds could unlock €50 billion in new capital, but companies point out that access to financing often hinges less on rulebooks and more on bureaucratic bottlenecks at the national level. Without fixing these, the benefits may remain unevenly distributed across member states.

Farmers are promised €1.6 billion in annual savings through reduced CAP paperwork. But industry groups warn that simplification at the EU level can be undone by new reporting obligations introduced domestically, particularly in areas like environmental conditionality.

Meanwhile, SMEs and mid-caps—often the loudest voices calling for regulatory relief—stand to gain from lighter GDPR obligations and digitalised product legislation. However, digitalisation itself carries costs, especially for smaller firms without IT capacity. “Simplification” that requires expensive new systems risks being seen as shifting the burden rather than removing it.

The defence package is perhaps the boldest, aiming to enable up to €800 billion in investment. But streamlining procurement and loosening financial rules comes with risks—both of favouritism in cross-border contracts and of creating parallel standards that complicate supply chains rather than smooth them.

Finally, the chemicals sector, already under strain from global competition, is watching closely. Reduced compliance costs are positive, but companies remain concerned that safety requirements will continue to evolve unpredictably, undermining the regulatory stability that simplification is supposed to bring.

From an industry perspective, the EU’s simplification agenda is a step in the right direction. But unless the reforms are paired with consistent implementation, genuine regulatory stability, and coordination across member states, businesses fear they may end up with a new layer of “simplified” red tape.