Corporate sustainability and sustainable finance

The EU corporate sustainability and sustainable finance framework aims to improve transparency, promote responsible business conduct and direct investment towards environmentally sustainable activities. It includes requirements for sustainability reporting and due diligence, as well as a classification system for sustainable economic activities. These areas are addressed respectively through the Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive and the EU Taxonomy.

Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) requires companies within its scope to report information on the sustainability-related risks and opportunities affecting their business and on the impact of their activities on people and the environment. Companies subject to the CSRD report with reference to the European Sustainability Reporting Standards (ESRS).

For companies in the refining industry, sustainability reporting may include information on emissions, environmental impacts, workers, and value chains. Clear and comparable reporting can help investors and other stakeholders understand how companies are transforming towards a lower-carbon model.

The CSRD and ESRS have been subject to changes under the Omnibus I simplification process. On 3 July 2026, the European Commission adopted revised ESRS intended to make the standards shorter and clearer, reduce the number of datapoints and introduce additional flexibility.

Corporate Sustainability Due Diligence Directive

The Corporate Sustainability Due Diligence Directive (CSDDD) requires companies within its scope to identify and address adverse human rights and environmental impacts connected with their operations, subsidiaries and chains of activities. The Directive applies a risk-based approach and allows companies to focus on areas where impacts are most likely and most severe, based on reasonably available information.

The Directive, amended through the Omnibus I simplification initiative, entered into force on 18 March 2026.

Fuel manufacturers often operate within complex international supply and customer networks. Obtaining information beyond direct business partners can therefore present practical challenges for companies carrying out due diligence across global value chains.

EU Taxonomy

The EU Taxonomy Regulation provides a common classification system for identifying economic activities considered environmentally sustainable. It is intended to help direct investment towards activities that support the transition to a climate-neutral economy and the EU’s broader environmental objectives.

For an economic activity to qualify as environmentally sustainable under the Taxonomy Regulation, it must meet four overarching conditions. These include making a substantial contribution to at least one of the EU’s six environmental objectives, doing no significant harm to the other objectives, meeting minimum safeguards and complying with the applicable technical screening criteria.

FuelsEurope’s position and recommendations

Sustainability reporting

FuelsEurope supports transparent and meaningful sustainability reporting that provides investors and other stakeholders with useful and comparable information. However, the reporting framework must be clear, proportionate and workable in practice.

Requirements that are overly detailed, unclear or difficult to verify can increase costs, divert resources from the substantial investment needed for industrial transformation and generate information of limited value.

FuelsEurope considers that, even after the simplification efforts under Omnibus I, the CSRD and the ESRS remain overly complex. In FuelsEurope’s view, this creates legal uncertainty, assurance risks and unnecessary implementation burdens without improving the quality of reported information.

Due diligence obligations

FuelsEurope supports the objective of strengthening the protection of human rights and the environment and recognises the value of a harmonised EU framework.

However, due diligence requirements must provide legal certainty, avoid duplication with other EU requirements and reflect what companies can reasonably control or influence across complex value chains. The framework should remain workable and proportionate and take account of the operational reality of multi-level, globally interconnected industries.

FuelsEurope supports the simplifications introduced through the Omnibus I process but considers that clear and proportionate implementation remains essential, both in the transposition into Member States’ legislation and in the development of guidance by the European Commission.

EU Taxonomy

FuelsEurope supports the EU Taxonomy’s objective of mobilising sustainable investment. However, FuelsEurope considers that the exclusion of certain economic activities, or the application of poorly designed criteria, could restrict access to finance for important transition projects.

FuelsEurope regrets that the Taxonomy currently excludes the manufacture of renewable fuels of non-biological origin beyond hydrogen, recycled carbon fuels, and carbon capture and utilisation. FuelsEurope encourages the European Commission to review the technical screening criteria to include these economic activities.

The EU Taxonomy should recognise the contribution of different technologies and pathways, including transitional activities, rather than favouring particular technological solutions.

FuelsEurope also considers that the EU Taxonomy should be consistent with other EU legislation, particularly the Renewable Energy Directive, ReFuelEU Aviation Regulation and FuelEU Maritime Regulation. Its technical screening criteria should not impose additional restrictive requirements beyond those frameworks.