This week in EU policy: Climate battles, sustainabilty standards and too much tax talk

Each week, we're keeping you in the loop on the most important news in the EU policy ecosystem. Here are the six most important things we've seen coming from in and around Brussels:

1. European Commission rolls out new product sustainability requirements

The news: The Commission unveiled its new five-year working plan for the Ecodesign for Sustainable Products Regulation (ESPR) and the Energy Labelling Regulation. The plan essentially is about improving sustainability and consumer information. It focusses on Steel and aluminium, textiles, furniture, tyres and mattresses.

What happens now: There’s still a lot of impact assessments and stakeholder consultations to come, but at least some of this is meant to be implemented at the end of 2026.

What it means for impact companies and investors: This is great news for circular economy startups in particular, as well as any looking at working on greener or more sustainable base materials, as when the requirements come into force that will put a lot of pressure on companies to adopt them.

Read more: More about this in our article here.

2. Commission faces climate challenge

The news: A group of climate and human rights campaigners have filed a complaint against the European Commission over the apparent ‘rollback’ of its sustainability agenda – particular relating to the rolled-back regulations on ESG/CSR reporting.

What happens now: The complaint has been made to the European Ombudsman, which will now decide if it will investigate.

What it means for impact companies and investors: This might well turn out to be more symbolic than anything, as the Ombudsman does not have the power to intervene directly. But depending on the eventual findings, this could re-apply pressure on the Commission to stick more closely to the sustainability standards committed to, which would be good news for startups working across the environmental impact sector.

3. US climate lawyers ready to battle with Trump administration

The news: In the US, lawyers for environmental groups are preparing for what will likely be protracted legal battles against the Trump administration using executive powers to roll-back renewables, as well as stripping climate NGOs of tax-free status.

What happens now: Cases have been filed yet, and lawyers quoted in US media appear ready for battles that could last years.

What it means for impact companies and investors: For the impact sector overall, and Europe in particular, the effect of these legal battles could have massive long-term impact. The Trump admin’s agenda has already done a lot to undermine the country’s leadership on climate, with capital and talent already seeking out new homes on other continents. If legal challenges against the agenda fail, that will likely set precedents making that attrition permanent and will perhaps even mark a more permanent global shift.

4. EU considering changing methane emissions rules for US LNG imports

The news: The EU is reportedly considering adding some wiggle room to its otherwise stringent methane emissions standards for LNG imports, in order to pacify the US in trade talks.

What happens now: It’s a tense time amid the global trade war, a deal could be made, or it could all fall apart, at any minute. But the relevant ‘methane equivalent’ rule the EU is apparently looking to tweak to accommodate the US comes into force in 2027.

What it means for impact companies and investors: It’s another case of geopolitics and security trumping emissions concerns, which is not great news for the EU energy transition. That said, as we’ve explored in recent weeks, there is a growing sense that if more immediate issues like energy security can be got under wraps in Europe, that may mean some attention flows back to the more long-term concerns of climate change.

5. Tax subcommittee to look into supporting green transition

The news: The EU's tax subcommittee is to hold a hearing this week. examining tax incentives for clean energy, aviation, and maritime transport.

What happens now: The open hearing is on the 24th of April, from 9:30 to 11:00am CET. The findings will inform future policy debate.

What it means for impact companies and investors: Okay this one is a little nerdy, even by our standards, but as we know, the devil is in the details. Tax measures to boost investment and innovation in the green transition could have a really big impact. This hearing is based on elements of the Draghi report, which urged mobilising more capital for energy transition, so looking at how the underlying fiscal regime might help get more money where it's needed is welcome news.

6. Dutch government announces tax relief for entrepreneurs

The news: The Dutch government has announced it will offer tax relief for startups looking to attract and retain international talent, allowing them to offer more competitive compensation packages.

What happens now: The changes, part of the larger spring memorandum (basically a mini-budget) are to take effect January 2027, pending approval.

What it means for impact companies and investors: The last one for this week, and oh look it's more tax news! This is great for the Dutch sector though, as it's designed to help startups (which of course includes impact companies) offer more generous packages to employees, hopefully to make them more competitive, reduce staff attrition and help them grow past that tricky scale-up phase. Great news for any impact startups in NL, and another sign of Europe seeing the need to step up on the international stage.