Emmanuel Macron may have just sounded the death knell for one of Europe’s most controversial green laws.

In a speech at Versailles on Monday, the French president called for abolition of the Corporate Sustainability Due Diligence Directive, a law that requires companies to monitor their global suppliers for human rights and environmental abuses. Many businesses loathe it.

“CSDDD and some other regulations has not just to be postponed for one year, but off the table,” Macron told an audience of business executives, who cheered.

Macron’s comments followed a similar statement from German Chancellor Friedrich Merz, who called for “complete repeal” of the directive on a visit to Brussels earlier this month.

“Clearly, we are very aligned now with Chancellor Merz and some other colleagues,” Macron said.

If the push from Europe’s two most powerful leaders succeeds, it would be a major escalation of the EU’s pro-business, anti-green push, which has already seen a slew of proposed “simplification” packages paring back many of the rules that were part of the European Green Deal.

Anti-green sentiment is also growing in European Parliament, where the center-right European People’s Party recently vetoed use of the term “Green Deal” in an environmental report on water. The EPP is Europe’s largest political group, counting Merz and European Commission President Ursula von der Leyen among its members.

Many businesses oppose the sustainability directive, complaining it is prohibitively onerous. The law requires companies to look deep within their global supply chain for abuses, and to act on them if found. It is already in line to be cut back and delayed as part of the Commission’s first omnibus simplification package.

But repealing the law in its entirety was not in serious discussion — until now.

Concession to Trump

Beyond potentially reducing bureaucracy for companies, any decision to scrap the due diligence directive could have a positive impact on talks between Brussels and Washington on heading off a full-scale transatlantic trade war, which are only now starting to get serious.

The administration of U.S. President Donald Trump has singled out the supply chain directive as the kind of nontariff barrier that his team blames for America’s big deficit in trading goods with the EU. In ditching a rule book they wanted to get rid of anyway, Europeans can present the move as a concession to Washington.

But persuading EU politicians and legislators to drop the law may prove difficult.

The directive has become one of the most contested issues within Germany’s new coalition government, with Merz’s conservative Christian Democratic Union (CDU) and the center-left Social Democratic Party (SPD) openly opposing each other on it.

Merz’s call for the law to be scrapped caught many of his SPD coalition partners by surprise.

The future of the directive was already a point of contention during government coalition negotiations, with the CDU pushing to abolish it. In the end, the parties reached a compromise: While the national due diligence law should be abandoned, the final coalition agreement states that the CSDDD should be retained and implemented “with minimal bureaucracy.”

German Finance Minister Lars Klingbeil of the SPD insists that Germany should stick to the plan set in the coalition agreement.

Macron and Merz would still need to persuade other member countries in the Council of the EU, which are currently negotiating their position on the Commission’s first omnibus package, to turn against the law.

In the European Parliament, support for abolishing it outright is unlikely to gain the full support of the centrist coalition, which includes the EPP, the center-left Socialists and Democrats and liberal Renew Europe (Macron’s own group).

If the EPP were to want to get rid of the due diligence directive, it could seek support among far-right groups. That move would controversially violate the so-called cordon sanitaire, an informal principle that centrist, pro-European groups should refrain from collaborating with the far right.

Oliver Noyan and Douglas Busvine contributed reporting.