The German government has expressed unified support for the EU Automotive Package, endorsing the inclusion of low-carbon materials such as green steel as part of compliance mechanisms. The position was confirmed following a coalition committee meeting held on April 10.
Under the framework, which was proposed in late 2025, carmakers would be required to achieve a 90 percent reduction in tailpipe emissions from 2035 onwards. The remaining 10 percent of emissions could be offset through the use of low-carbon steel produced within the EU, as well as e-fuels and biofuels, providing additional flexibility in meeting climate targets.
Industry sees demand boost for low-emission steel
The German Steel Federation (WV Stahl) welcomed the proposal, particularly the crediting mechanism for low-emission steel.
Industry representatives noted that the measure could simultaneously support the automotive sector’s decarbonization efforts and stimulate demand for green steel, helping to establish a lead market within the EU.
Energy costs continue to pressure industry
Despite policy support, concerns remain over high energy prices, which have been exacerbated by the Middle East crisis. The German government has introduced temporary relief measures, including a reduction in mineral oil tax on diesel and petrol by around 17 cents per liter for two months.
However, industry stakeholders raised concerns over the exclusion of industry from the immediate energy program and warned that energy-intensive sectors such as steel continue to face uncompetitive electricity costs.
Competitiveness at stake
The steel sector has called for the implementation of previously announced support measures, particularly electricity price compensation mechanisms. In addition, industry representatives have proposed the introduction of a guaranteed electricity price of €50/MWh for industrial users, covering all associated costs.
Stakeholders emphasized that such measures are critical to ensuring long-term competitiveness and supporting the transition to low-emission steel production. Without adequate policy support, rising energy costs could undermine both industrial output and decarbonization efforts in Germany’s steel sector.