Strictly speaking, there is no such thing as an ‘EU law’. At one point, the idea was to rename the so-called ‘directive’, because the term can be misleading. Directives are, in fact, fully binding. The same goes for ‘regulations’, which apply in all EU member states. These two legal instruments each serve their own purpose and have a different impact. But what exactly are they – and why does the difference matter? Let's break it down.

What is an EU regulation?

An EU regulation is a legal rule that applies directly in all 27 member states. National governments do not have to translate, or: transpose, it into their own legal systems. This ensures consistency: the rules are exactly the same in every country and can be enforced immediately.

In English, this type of law is called a regulation, although the European Commission often prefers the slightly bolder American term ‘act’. Regulations are binding and ensure EU law is applied in the same way across the Union. This prevents differences in how countries interpret or implement rules.

And they do not only apply to governments, but also to businesses, organisations and even individual citizens. A well-known example is the GDPR, the EU’s privacy regulation, which sets out how companies must handle personal data. This ensures that everyone in the EU is subject to the same rules.

What is an EU directive?

A directive is a type of EU law that requires member states to achieve certain goals but leaves it up to each country to decide how they do that. This gives governments room to adapt the rules to their national context.

Take, for example, the Renewable Energy Directive. It requires EU countries to use more sustainable energy, but each government may decide how it wants to meet that goal. This is done by the government in a legislative process: translating and submitting a bill to the national parliament.

Once the parliament has adopted the necessary legislation, the government notifies the European Commission. The Commission then checks whether the directive has been implemented correctly and on time. If not, it can take enforcement action. (The Netherlands, for instance, often has a list of directives that have not been transposed in time.)

Who makes the rules in the EU?

Creating a new EU policy involves several players. The European Commission drafts legislative proposals based on input from experts, public concerns and stakeholder interests. Then the 27 member states and the European Parliament negotiate every article of a proposed directive or regulation – and both must give their approval.

Meanwhile, businesses, trade unions, and civil society organisations also try to influence the process. This ensures that new rules are broadly supported and grounded in reality.

These laws do not appear out of nowhere. Sometimes, member states request the Commission to propose legislation – usually when an issue arises that requires joint action. In other cases, the Commission takes the initiative, based on research or pressing societal challenges. Here are three examples:

• The European Commission took the lead in reducing CO₂ emissions from cars. Since cars are traded freely across the EU, a single European standard made more sense than 27 different national rules. So the Commission proposed one common emissions standard, so that all EU car manufacturers operate under the same rules.
• In other cases, it’s the member states that take the lead. Southern European countries like Italy, Greece and Spain already called in 2021 for joint European action on migration. Their emergency shelters and registration centres were overwhelmed by the high numbers of migrants arriving via the Mediterranean. In 2024, this resulted in a new European migration policy, which sets out how migrants should be distributed more fairly among the member states.
• Sometimes, brand new EU rules are also softened or revised. Take the CSRD, the directive on environmental reporting. It had not yet been implemented, but already in spring 2025, the Commission presented a revised text. The idea is that in a time of geopolitical competition, businesses should face fewer EU rules.

Key differences at a glance

All EU laws apply to all EU member states. However, there are key differences between regulations and directives.

A regulation is binding and directly applicable in all EU countries, without the need for national implementation. This means the same rules apply across the EU, from the Netherlands to Slovenia. A directive is also binding, but member states retain flexibility in how they achieve the agreed goal. Directives must be transposed into national law.

Want to learn how a regulation or directive is developed? We’ll explain that in our next blog. Don’t want to miss it? Subscribe to our newsletter and stay up to date with our latest publications.