EU Regulatory Roundup – May 2025

From sweeping climate reforms to trade tensions and digital identity tools, May 2025 was a month of high regulatory activity in the European Union. Here's your comprehensive summary of the most important EU-level legal and policy developments across climate, digital, trade, health, and corporate sustainability.

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🌍 Climate & Environment

Carbon Border Tariff Narrowed to Big Polluters

The EU’s ambitious Carbon Border Adjustment Mechanism (CBAM) has been notably scaled back. Instead of applying to over 200,000 importers, only around 10%—those responsible for more than 99% of emissions—will be subject to carbon levies. The exemption applies to importers of less than 50 metric tons annually of steel, cement, and other targeted goods. Enforcement remains on track for 2026, with financial obligations starting in 2027.

Net-Zero Industry Act: Secondary Rules Issued

On May 23, the Commission unveiled four key regulations under the Net-Zero Industry Act, including the much-awaited list of strategic net-zero technologies and rules on how to select "priority" projects. A public consultation is open until August, with final legislation due by the end of the year.

POPs Regulation Gets Stricter

UV-328 has been added to the EU's Persistent Organic Pollutants (POPs) list. Meanwhile, a narrow exemption was granted for using PFOA in firefighting foams—a win for safety campaigners pushing for cleaner alternatives in chemical-intensive industries.

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💻 Digital, AI & Privacy

EU to Launch Age Verification App

Starting July, the EU will pilot an age-verification app to help platforms better protect minors. The app allows users to verify their age without revealing full personal details—an early prototype of the broader EU Digital Identity Wallet expected in 2026.

AI Act Becomes a Global Flashpoint

While the EU’s AI Act is being studied as a template by U.S. lawmakers, critics warn that its rigid approach might stifle innovation. The debate underscores how Brussels has become a global regulator of last resort in emerging tech—intentionally or not.

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🏛️ Trade & Geopolitics

Trump’s Tariff Threat Delayed

Former U.S. President Donald Trump delayed a planned 50% tariff on EU imports to July 9, after a request from Ursula von der Leyen. The EU condemned the measure as unjustified and damaging to transatlantic ties, though talks are ongoing.

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🏥 Health & Life Sciences

European Health Data Space Comes Into Force

The European Health Data Space (EHDS) regulation is now law. It creates a framework for EU citizens to control access to their health records and allows researchers and innovators to use anonymized data, under strict conditions.

> Deadline: Member States must establish national digital health authorities by 2027; cross-border access kicks in by 2029.

EMA Recommends Ten New Medicines

The European Medicines Agency (EMA) greenlit ten new treatments, including Aucatzyl, a gene therapy for acute lymphoblastic leukemia. Expect further growth in Europe’s advanced therapy market in 2025–2026.

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📊 Corporate Sustainability & ESG

CSRD & CSDDD Delayed to Ease Burden

Responding to industry pressure, MEPs voted to delay sustainability reporting rules under the CSRD and Corporate Sustainability Due Diligence Directive by two years. The EU Commission estimates €6 billion in saved compliance costs.

> Context: Policymakers face growing tension between green ambition and economic competitiveness.

Denmark Pushes Back Against Dilution of Supply Chain Law

Denmark stood alone in defending the green supply chain law after France and Germany sought to roll it back. Copenhagen called the proposal “essential” for maintaining Europe's climate and human rights leadership.

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🧴 Consumer & Chemical Safety

EU Cosmetics Regulation Updated

Two controversial substances—Trimethylbenzoyl Diphenylphosphine Oxide and Dimethyltolylamine—were banned under new amendments to the EU Cosmetics Regulation, despite earlier industry approvals. These moves reflect rising enforcement on carcinogenic chemicals.

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🏛️ Values & Governance

EU Ombudsman Investigates Green Law "Simplification"

The European Ombudsman has launched an inquiry into the Commission’s plan to roll back some green laws via the “simplification omnibus.” Civil society groups allege the changes bypassed proper regulatory scrutiny.

Final Thoughts

May 2025 saw the EU fine-tune major legislation at the crossroads of green transition, digital transformation, and global trade tensions. The growing resistance to compliance burdens in the corporate and member-state landscape suggests 2025 will be a year of regulatory recalibration—balancing ambition with economic realities.