The EU’s good intentions to reduce the bureaucratic burden on businesses are increasingly becoming nothing more than lip service. Old and new regulations are placing an ever-heavier burden on small and medium-sized industrial enterprises.

Frankfurt/Brussels, March 31, 2026 – “Well-intentioned, but too little, too slow, and poorly implemented” – this is how the VDMA assesses the EU’s attempts to deliver on its promise to reduce bureaucracy for businesses. Instead of relieving the burden on companies, existing and upcoming regulations are creating new burdens. “The EU regulates with a focus on individual sectors and ignores the impact on the entire industry. This creates an impenetrable thicket of regulations for small and medium-sized enterprises in the European machinery and equipment manufacturing sector. A cardinal mistake on the part of the EU is the failure to distinguish between consumer goods, which are manufactured in large quantities, and capital goods, which are often sold in specialized versions to companies that can assume their own responsibility in the market,” says Dr. Sarah Brückner, Head of Environment and Sustainability at VDMA.

This year alone, in addition to all the existing regulations, companies must also contend with the consequences of the following regulations:

• Expansion of the CO2 Carbon Border Adjustment Mechanism (CBAM) with its high costs due to reporting requirements and certificate purchases, without effective compensation for exports.

• The Critical Raw Materials Act (CRMA), which unilaterally imposes the burdens of procuring critical raw materials on companies.

• Digital Product Passport (DPP), launched as a well-intentioned project but now being rolled out too quickly and too broadly, thus becoming a burden rather than a relief.

• The new EU Packaging Regulation (PPWR), which imposes the time-consuming conformity assessment of packaging on machinery producing companies.

• Deforestation Regulation (EUDR), which does not provide for any thresholds and thus applies even to very small quantities.

“The list is by no means exhaustive: Cyber Resilience Act, the Battery Regulation, and more… While the underlying rationale for all these regulations may be understandable in individual cases, their implementation places an excessive burden on small and medium-sized industrial enterprises,” criticizes Dr. Brückner. “If member states also engage in ‘gold-plating’ during national implementation and go the extra mile, it is not surprising if companies in Europe produce only for the European market and no longer for the rest of the world,” warns the VDMA expert.

The most recent examples of this are the Industrial Emissions Directive and the Empowering Consumers Directive. From the EU’s perspective, the latter is explicitly aimed at consumers, but in Germany it is being expanded to cover business-to-business transactions. In doing so, the legislature is undermining its own efforts to reduce bureaucracy for companies. “A clear change of course in EU regulation and its German implementation is therefore urgently needed,” demands Dr. Brückner.

Contact: Sarah Brückner, Head of VDMA Environment and Sustainability, Phone +49 69 6603 1226, Email: sarah.brueckner@vdma.eu

VDMA represents 3,500 German and European companies in the mechanical and plant engineering sector. The industry stands for innovation, export orientation, and small and medium-sized enterprises. The companies employ a total of around 3 million people in the EU-27, more than 1.2 million of whom are in Germany alone. This makes mechanical and plant engineering the largest employer among capital goods industries, both in the EU-27 and in Germany. It accounts for an estimated turnover of around 900 billion euros in the European Union. Around 80 percent of the machinery sold in the EU originates from a manufacturing facility within the single market.