EU Legislation Roundup: March 2026

Staying informed on EU-level law helps you manage risk, maintain compliance and remain competitive in a fast-moving regulatory environment.

This edition, brought to you from our EU Knowledge Hub, highlights:

1. Deadline for transposing new rules on environmental claims
2. EU-US trade deal implementation
3. Omnibus I simplification package approved
4. New ‘EU Inc.’ pan-European business form
5. Updates on Digital Omnibus and AI Act
6. New clean energy package
7. AI Code on Marking and Labelling draft
8. Industrial Accelerator Act
9. New road toll rules for heavy-duty vehicles

EU: Deadline for transposing new rules on environmental claims

Member States were required to transpose the Directive on Empowering Consumers for the Green Transition (ECGT) by March 27, 2026. It amends EU consumer law to address misleading environmental claims and marketing practices. The ECGT targets generic claims such as “green” or “eco-friendly” where these are not supported by clear and verifiable evidence. It also restricts claims based solely on carbon offsetting and tightens rules on sustainability labels. It introduces new requirements on how durability, repairability and software updates are communicated to consumers.

Why this matters:

The ECGT raises the bar for environmental marketing and product messaging. Generic or unsubstantiated claims are more likely to be challenged. This increases risk across marketing, labelling and customer communications. Businesses should review claims, labels and supporting evidence before the rules apply from September 27, 2026.

EU: Parliament backs tariff framework for EU-US trade deal

On March 26, 2026, the Parliament adopted its position on the tariffs implementation of 2025 EU-US trade deal. It supports conditional tariff reductions linked to US compliance with agreed commitments. Parliament backs a suspension clause that allows the EU to withdraw tariff preferences if the US introduces new duties. It also supports a “sunrise clause,” under which the tariff reductions would apply only once the US upholds its commitments.

Why this matters:

The approach conditions tariff benefits on US compliance and allows the EU to react quickly to new trade measures. That reduces predictability for businesses relying on transatlantic supply chains and pricing assumptions. Companies should factor in the risk of suspension or delayed benefits when planning pricing, sourcing and cross-border operations.

EU: Omnibus I Directive enters into force

On March 18, 2026, the Omnibus I Directive entered into force. The Directive introduces targeted amendments to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). 

The updated package streamlines the EU’s sustainability framework by easing compliance obligations for businesses and adjusting key applicability thresholds. Under the revised rules, the CSRD will apply to companies with over 1,000 employees and €450 million net annual turnover. The CSDDD will apply to companies with over 5,000 employees and €1.5 billion net annual turnover. Member States must transpose the CSRD amendments by March 19, 2027 and the CSDDD amendments by July 26, 2028.

Why this matters:

The changes significantly narrow the scope of both CSRD and CSDDD. Some companies may fall out of scope, while others face delayed or reduced obligations. This affects reporting, due diligence and group structuring decisions. Businesses should confirm scope, reassess implementation timelines and adjust sustainability programmes accordingly.

EU Inc. / 28th Regime - New Pan-European Business Form

On March 18, 2026, the Commission unveiled the ‘EU Inc.’ proposal creating an optional, harmonised corporate form for the single market. Businesses could adopt a single legal form recognised across all 27 Member States. The proposal streamlines incorporation via 48 hour digital registration, lowers capital requirements, and standardises governance, including employee share schemes. However, it does not replace national rules on tax, labour, or sector specific regulation, including financial oversight. The proposal now awaits approval from the Parliament and the Council, with entry into force expected in 2027. If approved, it will simplify cross-border establishment, investment and employee incentives, and reduce barriers to operating across the EU.

Why this matters:

If adopted, the proposal would allow companies to operate across the EU under a single legal form, reducing the need for multiple national entities. That would simplify group structure, governance and internal organisation across Member States. It could also reduce incorporation costs, administrative burden and duplication. Tax and labour rules would remain national, which may still shape structuring choices.

EU: New Digital Omnibus changes to the AI Act

On March 13, 2026, the Council agreed its position on the proposed AI Act under the Digital Omnibus package. On March 26, 2026, the Parliament also adopted its position.

Key Council changes include a ban on AI that generates non consensual sexual or intimate content, and child sexual abuse content. Rules for standalone high risk AI systems would apply from December 2, 2027, with embedded systems applying from August 2, 2028. The Council restores the requirement to register AI systems treated as exempt from high risk status. It also reinstates a strict necessity test for processing special categories of personal data for bias detection. National AI regulatory sandboxes would also be delayed to December 2, 2027. Parliament supports the delayed timelines and adds a ban on AI systems generating non-consensual intimate or nude images. It also supports more flexible requirements for smaller companies and aims to reduce overlap with existing product regulations.

Why this matters:

Both co-legislators support delaying key high-risk AI obligations to 2027 and 2028. This gives businesses more time, but does not reduce the overall compliance burden. New prohibitions and stricter conditions on data use also increase risk for certain use cases. Businesses should check whether high-risk classification, data use and product timelines need adjustment.

EU: Commission unveils new clean energy package

On March 10, 2026, the Commission unveiled a package to strengthen EU energy independence and lower energy costs for consumers. It focuses on expanding clean homegrown energy and reducing exposure to volatile fossil fuel markets.

The package introduces a Clean Energy Investment Strategy to mobilise private capital for grids, efficiency projects and emerging technologies. The European Investment Bank Group plans over €75 billion in financing, including €500 million for the Strategic Infrastructure Investment Fund.

A Citizens Energy Package aims to reduce bills, make switching easier and support households producing their own clean energy. The Commission also presented a Strategy for Small Modular Reactors to enable deployment of Europe’s first operational units in the early 2030s.

Why this matters:

The package reinforces the EU’s push to lower energy costs through domestic clean energy, stronger grids and lower fossil fuel dependence. This matters for energy-intensive businesses, infrastructure investors and companies exposed to power price volatility. New financing tools may also support grids, efficiency projects and emerging technologies. Businesses should assess where lower costs or new funding projects could support investment plans.

EU: Second draft of AI Code on Marking and Labelling

On March 5, 2026, the Commission published the second draft of Code of Practice on marking and labelling AI generated content. The revised version streamlines obligations, adds flexibility, and promotes open standards and a common EU labelling icon. It introduces a two layered marking system for AI generated or AI-manipulated content, supported by optional tools such as fingerprinting and logging. It also simplifies requirements for labelling deepfakes and AI generated text. The draft also gives providers and deployers clearer guidance ahead of transparency requirements applying from August 2026.

Why this matters:

The revised draft gives businesses a clearer view of expected AI transparency measures. This matters for providers, platforms, publishers and businesses using customer-facing generative AI. Open standards and a common EU icon may also influence product design choices. Businesses should now test whether tools, workflows and notices meet the expected standards before the new requirements start to apply.

EU: Industrial Accelerator Act proposed

On March 4, 2026, the Commission proposed the Industrial Accelerator Act (IAA) as part of the Clean Industrial Deal. It aims to raise the manufacturing’s share of EU GDP to 20% by 2035. The proposal introduces ‘Made in EU’ and low carbon requirements in public procurement and public support schemes. These measures initially target strategic sectors such as steel, cement, aluminium, automotive and net zero technologies, with possible extension later. It also sets new conditions for major foreign direct investments in sectors including electric vehicles, batteries, solar and critical raw materials. The IAA also seeks to simplify approval processes and improve coordination for strategic projects. More broadly, it is intended to strengthen EU industrial capacity and reduce dependencies on non-EU suppliers in key sectors.

Why this matters:

The IAA proposal signals a more interventionist EU industrial policy. Procurement, subsidies and investment reviews will increasingly favour low-carbon and EU-based production. That may affect sourcing, manufacturing footprint and market access. Businesses operating in strategic sectors should identify where projects, bids or expansion plans depend on non-EU inputs. Future EU preference conditions could also reshape investment cases, supply chains and go-to-market strategies.

EU: New road toll rules for heavy-duty vehicles

On March 4, 2026, the Council of the EU agreed its negotiating mandate to revise the Eurovignette Directive. The proposed changes aim to improve legal clarity and simplify how Member States apply road toll rules for heavy duty vehicles. They are intended to promote consistent application of CO₂ based charging rules ahead of changes taking effect from July 1st, 2026. The Council position also addresses how and when CO₂-based charges apply.

Compared with the Commission proposal, the Council adopts a more cautious approach. It recognizes the climate benefits of retrofitting but avoids immediate reclassification of a vehicle’s CO₂ class. It also removes the option of lower tolls for “sustainable trailers” and maintains a strict CO₂ only method.

Why this matters:

The changes aim to clarify how CO₂-based toll charging should work from July 1st, 2026. That matters for transport operators, manufacturers and logistics businesses that need visibility on future toll costs across Member States. The Council takes a stricter approach to retrofitting and removes lower toll options linked to sustainable trailers. Lower tolls would depend only on the CO₂ classification system. The proposal is still under negotiation and will require agreement between the Council and the Parliament before adoption.

Co-authored by Uendi Barreti, Paola Paccani and Clare Johnston (Knowledge)

Further reading

EU Pay Transparency Directive: Snapshot update

EU: Pharmaceutical Law Reform

Implementation of the EU Pay Transparency Directive: The latest development in France

EU AI Act: High-risk AI systems in employment – practical steps for compliance

Flash update – EU: Industrial Accelerator Act

Flash update – EU Inc. / 28th Regime – New European Business From

Flash update – EU: Council approves Omnibus I simplification package

Legal briefing: Green claims under scrutiny in EU consumer law