The German Steel Federation (WV Stahl) has expressed concerns over a joint Franco-German proposal for the future of the European automotive industry, warning that the proposed changes could weaken incentives for the use of low-emission steel in European vehicle production.
France and Germany have announced that they have agreed on a common approach aimed at supporting the transformation of the European automotive industry while maintaining climate objectives and strengthening domestic manufacturing. The proposal combines carbon emissions reduction targets with regulatory flexibility and incentives for investment, innovation and European production. The Franco-German agreement proposes replacing the European Commission's planned standalone crediting mechanism for low-emission steel with a broader super-credit mechanism for electric vehicles starting in 2027. Under the proposed approach, low-emission steel and aluminum produced in Europe would be considered jointly within the super-credit mechanism. In addition, the proposal also includes incentives for investment, research and development, European manufacturing and more resilient supply chains, with particular emphasis on strengthening Europe's capacity to develop and produce the next generation of electric vehicles.
Therefore, WV Stahl warned that combining the two materials could reduce the effectiveness of targeted incentives for carbon-reduced steel and undermine efforts to establish a lead market for green steel.
German government urged to support steel incentives by 2030
Kerstin Maria Rippel, CEO of WV Stahl, welcomed the possibility of introducing incentives for low-emission materials earlier and the emphasis on European production. However, Rippel stressed that the effectiveness of the mechanism would be more important than its implementation date.
She therefore called for maintaining the European Commission's proposed standalone steel credit scheme while allowing its implementation to be brought forward. This would stimulate demand for carbon-reduced steel in European vehicle production before 2035.
Alternatively, Rippel stated that any new mechanism should provide incentives equivalent to those envisaged under the Commission's original proposal. She emphasized that effective demand-side measures are necessary to support industrial investment and maintain steel production in Europe. Rippel also called on the German government to continue supporting a dedicated steel credit mechanism, with implementation no later than 2030.
