Mandatory sustainability: How the Green Deal and Global Regulations are reshaping biotech
- Mira
- 7 days ago
- 8 min read
Updated: 6 days ago
Navigating the Green Deal Biotech Impact — What Climate Compliance Means for the Future of Innovation
The age of mandatory sustainability
Sustainability has long been considered a "nice-to-have" in biotech and pharma - but this is changing fast. With the advent of binding regulations like the European Green Deal and its global counterparts, sustainability is moving from corporate responsibility to legal obligation. For biotech and bioprocessing companies, the implications are deep: from funding to R&D, production processes to supply chains, sustainability now shapes the future of innovation.
What is the European Green Deal?
Launched by the European Commission in 2019, the European Green Deal aims to make Europe the first climate-neutral continent by 2050. It lays out a comprehensive roadmap for transforming the EU’s economy, with sustainability at its core. Over the past decades, the EU has significantly reduced its greenhouse gas emissions. According to the European Environment Agency, by the end of 2022, emissions had dropped by 31% compared to 1990 levels, with a projected additional reduction of 8% in 2023 - marking solid progress toward climate neutrality. However, current projections indicate that emissions will only fall by 49% by 2030, falling short of the Green Deal’s 55% reduction target. To get back on track, the EU must adopt and implement more ambitious policies and measures. [1-2]
Key objectives of the European Green Deal include:
Achieving net-zero greenhouse gas emissions by 2050
Reducing emissions by at least 55% by 2030 (compared to 1990 levels)
Mandating sustainability reporting and implementing carbon pricing
In addition, the Green Deal aims to promote a circular economy—an area where the EU still has room to grow. Currently, only 11.5% of materials used come from secondary sources, and material consumption reached 14.8 tonnes per capita in 2022, a 6% increase from the previous year. [3] The initiative also prioritizes increasing energy efficiency, expanding renewable energy use, reducing pollution and waste, protecting biodiversity, and decoupling economic growth from resource consumption. [1]
For biotech, these targets call for a rethink of how materials are sourced, processed, and disposed of. The European Green Deal is supported by a broader regulatory package, including the Emissions Trading System (ETS), which puts a price on greenhouse gas emissions [4], and the Nature Restoration Law and Industrial Emissions Directive, which address environmental impacts across sectors. [5,6] The Green Deal Industrial Plan, built on four pillars, aims to scale up clean technology development, manufacturing, and energy independence - especially to reduce reliance on fossil fuels. [7,8] While most of these regulations don’t yet apply directly to biotech and pharma, they could shape the industry’s future regulatory landscape.
Key regulations that will affect biotech and pharma
While not all of these regulations currently apply to the biotech and pharma industry, several major legislative initiatives under the European Green Deal and related EU frameworks will increasingly influence operations across the sector. These policies are interconnected and lay the groundwork for how sustainability will be evaluated and enforced in the coming years.
EU Taxonomy Regulation
In force since 2020, the EU Taxonomy Regulation defines which economic activities are considered environmentally sustainable. This framework affects both investment access and financial reporting. If a product or process does not align with taxonomy standards, securing funding may become more difficult. Financial tools like the InvestEU Program, NextGenerationEU, and the Just Transition Mechanism are directly linked to this regulation, as they mobilize investment toward sustainable innovation and support regions most affected by the transition. [9]
Corporate Sustainability Reporting Directive (CSRD)
The CSRD replaces the Non-Financial Reporting Directive (NFRD) and expands the scope, detail, and standardization of sustainability reporting. It aims to increase corporate transparency by mandating the disclosure of environmental, social, and governance (ESG) risks, as well as how a company’s operations impact people and the planet.
Phased in from 2024 to 2026, the CSRD requires companies to report ESG data, including Scope 1, 2, and 3 emissions, material circularity, and supply chain impacts. Large companies are already under the directive as of 2024, while listed SMEs will follow in 2026. Reporting must follow the European Sustainability Reporting Standards (ESRS) and be submitted in a digital format for accessibility and comparability. [10-11]
Corporate Sustainability Due Diligence Directive (CSDDD)
From 2027, the CSDDD will require large EU companies (turnover >€150M, >500 employees) and large non-EU companies (EU revenue >€300M) to conduct human rights and environmental due diligence across their entire value chains. The scope is expected to broaden in subsequent years. [12]
Critical Raw Materials Act (CRMA)
The CRMA is designed to strengthen the EU’s supply chain resilience for critical raw materials. While its main focus is on sectors like renewable energy and digital tech, its emphasis on supply chain transparency may indirectly impact pharma and biotech companies dependent on specific materials. [11]
EU’s Carbon Border Adjustment Mechanism (CBAM)
The CBAM aims to prevent "carbon leakage," a phenomenon where companies relocate production outside the EU to bypass stringent climate policies or where carbon-intensive imports replace EU products. By putting a carbon price on imported goods, CBAM encourages cleaner production practices globally and levels the cost playing field between EU-produced and imported goods. Between 2023 and 2025, CBAM will operate in a transitional phase for selected sectors, with the definitive regime beginning in 2026. Although the biopharma and biotech sectors are currently excluded, future expansions may include them. [11-13]
A recent omnibus proposal aims to reduce the regulatory burden, particularly for small and medium-sized enterprises (SMEs). It suggests limiting the number of companies subject to mandatory reporting, potentially excluding up to 80% of those previously covered. A voluntary standard for SME reporting (VSME) will be introduced, and revisions to the ESRS will simplify data requirements. Reporting deadlines for companies not yet under the CSRD, including listed SMEs, may be delayed by two years. Additionally, small importers such as individuals or SMEs could be exempted from CBAM obligations. [12,14]
Table 1: Regulations as part of the EU Green Deal and their key requirements and application timelines. *Part of the omnibus simplification proposal, which may undergo adjustments in timeline and scope.
Regulation | Key Requirement | Applies from |
|---|---|---|
EU Taxonomy | Align economic activity with green criteria | Now |
CSRD | Report ESG metrics, incl. Scope 3 emissions | 2024-2026 phased, 2024 for large companies, 2026 for listed SMEs* |
CSDDD | Conduct environment and human rights due diligence across their operations, subsidiaries, and value chains | 2027, large EU and non-EU companies* |
CBAM | CBAM certifications for imported non-EU products | 2023-2025 transitional 2026 definite for cement, iron and steel, aluminium, fertilisers, electricity and hydrogen* |
Similar deals and global moves
Europe is not alone in its push toward climate neutrality. Around the world, governments and institutions are developing parallel sustainability frameworks that align with or complement the goals of the European Green Deal.
In the United Kingdom, the Net-Zero Strategy introduced in 2021 targets carbon neutrality by 2050. It includes interim carbon budgets across seven key sectors and emphasizes the importance of green innovation to drive economic transformation.
In the United States, the Inflation Reduction Act (IRA), passed in 2022, provides massive incentives for clean technologies and low-emission manufacturing. It aims to reduce national greenhouse gas emissions by 40% by 2030, compared to 2005 levels, through investment in renewable energy, sustainable infrastructure, and innovation.
The Asia-Pacific region is also advancing ambitious climate goals. China has committed to reaching carbon neutrality by 2060, with increasingly stringent interim regulations. Japan’s Green Transformation (GX) strategy promotes low-carbon innovation and corporate disclosure, aiming for net-zero emissions by 2050. South Korea’s Green New Deal, launched in 2020, outlines its path to net-zero by 2050, focusing on digital and green industry development. Australia’s 2021 net-zero plan targets the same year, using key technologies such as low-emission hydrogen and carbon capture across six defined sectors. [15-16]
At a global level, frameworks such as the United Nations Sustainable Development Goals (SDGs) shape national and regional policies by setting a common sustainability agenda. Additionally, the Science Based Targets initiative (SBTi) and the Task Force on Climate-related Financial Disclosures (TCFD) are becoming influential standards, particularly in investment and corporate strategy, reinforcing the global trend toward mandatory climate compliance.
Implications for the Biotech and Biopharma Industry
For biotech and biopharma companies - particularly those in early stages - sustainability regulations are becoming more than just a reputational issue. Increasingly, they represent a financial imperative. Funding access is now closely tied to environmental and social governance performance. In fact, the value of the EU’s net-zero start-up ecosystem reached over €100 billion in 2021, more than doubling since 2020. The green economy also supports over 4.5 million jobs in Europe, up from 3.2 million in 2000, indicating the economic momentum behind climate-focused innovation. [17]
Investors will increasingly demand ESG transparency
Supply chain scrutiny will intensify, especially around Scope 3 emissions
Innovation will shift towards low-impact, circular, and scalable processes
How companies can prepare
Regulations are coming fast—but preparation can give you a competitive edge. Here’s how:
Integrate ESG from Day One: Design R&D processes with sustainability in mind.
Start Measuring Emissions: Especially Scope 3, which includes supplier and product life cycle impact.
Adopt LCA Tools: Life Cycle Assessments help track product sustainability performance.
Choose Sustainable Suppliers: Collaborate with partners whose materials and processes align with EU Taxonomy.
Communicate Transparently: Make sustainability a part of your investor and customer narrative.
From optional to operational
Sustainability is no longer optional - it’s becoming operational. Regulations like the EU Green Deal are rewriting the rules of biotech, and companies that don’t adapt risk being left behind. But for those who prepare early, the upside is enormous: better access to funding, stronger investor trust, and a real chance to drive change.
Green Elephant Biotech is committed to helping the industry meet these challenges - with scalable, plant-based solutions designed for a more sustainable future of biotech. The CellScrew® exemplifies this approach - combining sustainability and performance with a carbon footprint that is just 10% of that of conventional alternatives, and reducing plastic waste by up to 80% in laboratory settings.
References
[1] European Environment Agency, Total net greenhouse gas emission trends and projections in Europe, 31.October 2024, last accessed 16.04.2025, available from https://www.eea.europa.eu/en/analysis/indicators/total-greenhouse-gas-emission-trends
[2] European Commission, The European Green Deal - Striving to be the first climate-neutral continent, last accessed 16.04.2025, available from https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en
[3] European Commission, 8th EAP mid-term review confirms 2030 climate & environmental targets within reach, last accessed 16.04.2025 from https://environment.ec.europa.eu/news/eu-2030-climate-and-environmental-targets-within-reach-2024-03-13_en
[4] European Commission, About the EU ETS, last accessed 16.04.2025 from https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets/about-eu-ets_en
[5] European Commission, Nature Restoration Regulation, last accessed 16.04.2025 from https://environment.ec.europa.eu/topics/nature-and-biodiversity/nature-restoration-regulation_en
[6] European Union, Council of the European Union, Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (recast) (Text with EEA relevance), 06 January 2011, available from https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32010L0075
[7] European Commission, REPowerEU Affordable, secure and sustainable energy for Europe, last accessed 16.04.2025, available from https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en
[8] European Commission, The Green Deal Industrial Plan - Putting Europe’s net-zero industry in the lead, last accessed 16.04.2025, available from https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/green-deal-industrial-plan_en
[9] European Commission, Renewed sustainable finance strategy and implementation of the action plan on financing sustainable growth, 8 March 2018, last accessed 16.04.2025, available from https://finance.ec.europa.eu/publications/renewed-sustainable-finance-strategy-and-implementation-action-plan-financing-sustainable-growth_en
[10] European Parliament, Council of the European Union, Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting (Text with EEA relevance), 05 January 2023, available from https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022L2464
[11] Brennan S, Gonzalez, RB, Puzniak-Holford M, Kilsby R, Subramoni A, Sustainability regulation outlook 2024, 18 February 2024, Deloitte Insights, last accessed 16.04.2025, available from https://www2.deloitte.com/us/en/insights/environmental-social-governance/sustainability-regulation-outlook.html
[12] Ecovadis, Omnibus Package: A Reality Check for the EU Sustainability Reporting and Due Diligence Regulations, February 2025, last accessed 16.04.2025, available from https://resources.ecovadis.com/blog/omnibus-package-a-reality-check-for-the-eu-sustainability-reporting-and-due-diligence-policies
[13] European Commission, Carbon Border Adjustment Mechanism, 28 March 2025, last accessed 16.04.2025, available from https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en#sectoral-information
[14] European Commission, Questions and answers on simplification omnibus I and II, 26 February 2025, last accessed 16.04.2025, available from https://ec.europa.eu/commission/presscorner/detail/en/qanda_25_615
[15] Hongqiao L, Evans S, Zhang Z, Song W, You, X, The Carbon Brief Profile: China, 30 November 2023, Carbon Brief, last accessed 16.04.2025, available from https://interactive.carbonbrief.org/the-carbon-brief-profile-china/index.html
[16] Paula Espada Blanco, Camille Forzy, Sara Leal de Matos-Powell, Leon Peters and Ole Ringen, Green Deals around the Globe, 3 February 2025, SciencesPO European Chair for sustainable development and climate transition, last accessed 16.04.2025, available from https://www.sciencespo.fr/psia/chair-sustainable-development/2025/02/03/green-deals-around-the-globe/
[17] European Commission, Delivering the European Green Deal - on the path to a climate-neutral Europe by 2050, last accessed 16.04.2025, available from https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/delivering-european-green-deal_en
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