ACEA: CBAM implementation at risk amid regulatory delays
The European Automobile Manufacturers’ Association (ACEA) has warned that with just two months remaining before the final implementation phase of the Carbon Border Adjustment Mechanism (CBAM) in 2026, the continued absence of key legislation is creating serious uncertainty.
In a statement issued in Brussels, the European Automobile Manufacturers’ Association (ACEA) said that automotive producers have already devoted significant resources to CBAM reporting and are preparing to fully comply once the mechanism enters into force. However, the association warned that with CBAM charges due to apply from January 2026, many critical implementation details remain unknown, creating growing concern across the sector.
According to ACEA, the automotive industry is among the sectors most affected by CBAM. European manufacturers import large volumes of steel and aluminium, and accurate reporting of embedded carbon emissions in these materials is essential for the mechanism’s proper functioning.
ACEA underlined that the European Commission has yet to publish guidance on key elements such as emission calculation methodologies, default values, the sale and repurchase of CBAM certificates, and the role of accredited verifiers.
ACEA Director General Sigrid de Vries stated: “Automakers are committed to making CBAM work and have already invested heavily in compliance operations. But the fact that such critical aspects remain unclear makes a smooth implementation on 1 January 2026 almost impossible. The Commission must urgently publish the missing texts and provide flexibility for businesses in the coming year.”
CLEPA: EU losing ground in global automotive market
Europe’s automotive suppliers have issued a stark warning to authorities to support the industry or risk manufacturing capabilities leaving the continent.
“With up to 75% of the value of vehicle components made in Europe, the continent’s automotive supply industry generates substantial economic value and supports hundreds of thousands of jobs,” according to the European Association of Automotive Suppliers (CLEPA). “Yet Europe’s automotive suppliers are issuing a stark warning based on a recent study of European value creation: without urgent and decisive EU action, the continent risks losing its industrial backbone, hundreds of thousands of jobs, and its capacity to lead in clean mobility and innovation.”
A new study by Roland Berger, commissioned by CLEPA, highlights that European suppliers face a cost disadvantage of 15-35%, mainly driven by high energy and labour costs, regulatory burdens, and fragmented frameworks. Meanwhile, countries such as China and the US combine industrial support measures with protective mechanisms, creating structural disadvantages and unfair competition, the association claims.
According to the study, without urgent EU action, up to 23% of European value add is at risk by 2030 through the combined effect of powertrain transition and value transfer outside the EU. In practice, Europe could see the loss of up to 350,000 jobs, eroding both employment and the industry’s wider social contributions, Kallanish notes.
“Europe is in a decisive battle for its industrial sovereignty,” says CLEPA secretary general Benjamin Krieger. “Suppliers are committed to invest and innovate, but they cannot do so on an uneven playing field. Maintaining a competitive and resilient automotive ecosystem in the EU will require urgent, market-driven action by industry and targeted policy measures, to strengthen Europe’s attractiveness as a location for manufacturing, R&D and investment.”
This includes addressing key location factors such as electricity prices and regulatory burden, while also considering policies to ensure EU local content in vehicles to retain know-how and production capacity, he adds.
Suppliers employ 1.7 million people in Europe and invest €30 billion ($35 billion) in R&D annually. CLEPA is thus urging policymakers to swiftly address competitiveness challenges, evaluate options to reduce structural costs and cut red tape. It should also prioritise technology openness in decarbonisation, in a swift revision of CO2 standards regulation for cars, vans and trucks.
Svetoslav Abrossimov Bulgaria
Tata Steel UK launches research initiative to develop AI-driven low-carbon auto steel
Tata Steel UK has launched a research initiative named ADAPT-EAF (Accelerating the Development of Automotive and Packaging steel Technology for Electric Arc Furnace production) to create a new generation of high-performance steel products from electric arc furnace (EAF) technology, aimed at revolutionizing automotive body parts and packaging solutions like food cans, a company statement said on Monday, July 14.
ADAPT-EAF brings together Tata Steel UK and University of Cambridge, Imperial College London, and the University of Warwick, reflecting Tata Steel’s vision of leading green steel innovation in the UK, the statement said.
The announcement comes close on the heels of Tata Steel UK commencing ground breaking for its new EAF at its Port Talbot steel mill.
As the UK steel industry shifts toward EAF processes, ADAPT-EAF will tackle a critical challenge related to controlling residual elements in high-recycled-content steel, which can influence the quality and performance of steels used in automotive and packaging applications, the company said.
The project will develop an AI-powered platform to accurately predict how various scrap materials affect steel quality and processing. This digital tool will be combined with rapid alloy prototyping and testing to generate vital data and design new steel grades optimized for EAF production, it added.
Furthermore, Tata Steel UK and its academic partners will build a comprehensive digital and experimental platform to design innovative, low-CO₂ steel products that can be manufactured in the UK, it said.
Steel, automotive tariffs cause manufacturing uncertainty
Uncertainty remains over the impact recent US tariffs will have on the steel and automotive sectors, Stephen Phipson, chief executive of Make UK, said during a Business and Trade Committee hearing this week.
“We’re waiting for the full effects,” Phipson noted, highlighting three main areas of concern, with possible direct and indirect impacts on demand and jobs.
“There is a case to be made that some areas, they can probably stand a 25% tariff in terms of the consumer prices, but others certainly can’t. So there would be a direct effect there,” he said.
“There is the indirect effect, particularly around the EU; a lot of our … manufacturers are in the supply chain to EU businesses, which are then exporting final products to the US. It depends on where the EU negotiations end up as to what the effects will be in terms of volumes on UK manufacturing; so, that’s a grave concern,” he added.
For some steel products, he expects buyers to pay the 25% tariff as they cannot currently be sourced domestically in the US.
“With the 25% on steel, which [are] not normal steel products. These are advanced products. These are more specialty steel, specialty components. Now, in a lot of cases, the customers can’t do without those. They’re the single source for those items. So, the consumer will actually end up paying the 25%, but the question … is, does that curtail demand in the process of doing it whilst people re-source, if those tariffs persist for any length of time?”
Stability is also a concern, Kallanish learns from the session.
“We don’t know from one day to the next, whether [US President Donald] Trump’s going to carry on, whether he’s going to suspend, whether he’s going to change; it makes planning your business and your investments extremely challenging,” Phipson said.
“It’s … very difficult to know exactly what the demand reduction will be as a result of tariffs,” he added.
He also highlighted the work manufacturers were doing to mitigate the impact.
“Other manufacturers are … putting in temporary contingency plans at the moment, hoping that in the next month or two we can get some sense, and they don’t have to do the next level, which will be, if you see a demand reduction, scaling back factory capacity.”
He told the committee the manufacturing sector will “absolutely have to” lay off staff if a tariff deal is not done with the US by summer.
“Many of [the] large companies [have] put contingencies in place … [which] gives them maybe three months of gap. So that gives you an order of time scales before there would be a reduction in capacity planned,” Phipson noted.
“For SMEs, they’re living hand to mouth. They want to know day to day whether adding 10% to their product is going to reduce the amount of volume they’re shipping to the United States. And so for them, it’s a much more direct impact; so the larger ones can put this off for a few months, but the smaller ones are going to see it now,” he concluded.
Carrie Bone UK
Automotive sector woes threaten French car components producers
The French automotive sector is facing significant pressure from stringent EU environmental regulations, ambitious energy transition targets, declining competitiveness, and the US imposition of a 25% tariff on car imports.
These factors are prompting car manufacturers to explore the option of sourcing more affordable components from outside the EU, threatening domestic manufacturing.
French passenger car and light commercial vehicles (LCV) combined production decreased by 10% last year compared to 2023, says French carmakers’ association Organisation Internationale Des Constructeurs Automobiles (OICA).
The country’s automakers produced 910,243 passenger cars in 2024, reflecting a decrease of 11%. LCV output in 2024 declined 7% to 447, 458 units. Overall production stood at 1,357,701 vehicles, down from 1,505,079 in 2023.
According to local automotive component makers association FIEV, the situation in Europe and France is concerning. National production falling to 1.3 million vehicles in 2024 reflects a collapse of 63% since 2002 and 38% since 2020, FIEV president Jean-Louis Pech warned during a senate hearing last week.
More than 70% of FIEV members believe their production in France and Europe is in danger. 55% have already recognised the possibility that French and European automakers may start sourcing components from lower-cost competitors outside of Europe, according to a survey conducted in March.
In 2024, employment in the car component manufacturing sector in France decreased to approximately 56,000 jobs, reflecting a 17% decline relative to 2019 levels.
Since January 2024, approximately 7,300 jobs have been eliminated or are at risk due to restructuring initiatives or site closures. At the European level, 42% of suppliers anticipate operating at a loss in 2025, FIEV says in a document obtained by Kallanish.
The period of high inflation from 2022 to 2024 significantly widened the competitive disparity between European and Asian suppliers. Besides the US 25% car import duty, European equipment manufacturers are suffering from a general decline in vehicle production and slow offtake of electric vehicles in Europe.
The association is calling for the implementation of a baseline requirement of 75-80% of “made in Europe” content in vehicles. It is also seeking solid European measures to enhance the competitiveness of the automotive sector, especially amid the shift towards electric vehicles.
This can be achieved by executing a European investment strategy modelled after the American IRA. This includes measures such as lowering energy costs, decreasing mandatory salary deductions and production taxes in France, and simplifying access to financing, particularly for small and medium-sized enterprises.
Europe and Asia brace for impact as US auto tariffs kick in
Asia and Europe are bracing for impact as the US administration’s 25% tariffs on imports of cars, light trucks, and auto parts are set to disrupt trade flows, mostly from key exporting countries like South Korea, Japan, and Germany.
The tariffs on cars and light trucks took effect from April 3, while duties on auto parts will be effective on May 3. However, the auto industry will not face additional tariffs announced by the US administration on April 2.
As vehicles and automotive parts are closely associated with steel and aluminum markets, the move is expected to add another layer of uncertainty as the US already has imposed 25% tariffs on all steel and aluminum imports, leading to retaliation by other countries.
South Korea’s Prime Minister Han Duck-soo said April 3 that his country will “quickly prepare emergency support measures” for industries and companies that will be affected by US tariffs on automobiles and other items.
In response to the April 2 tariff announcement by the US, China said it will take countermeasures to safeguard its own rights and interests, according to the spokesperson of the Ministry of Commerce.
Japan’s Prime Minister Shigeru Ishiba on March 27 said his government will put “all options on the table” in dealing with the US tariffs.
The European Automobile Manufacturers’ Association said the EU and the US must talk to find an immediate resolution to avert tariffs and the damaging consequences of a trade war that would not only negatively impact global automakers but US domestic manufacturing as well.
Asia
Japan shipped 1.4 million cars to the US in 2024 to become the third largest exporter to the US, according to US Department of Commerce data.
Japanese vehicle exports to the US were valued at Yen 6.03 trillion ($39.9 billion) in 2024, up 3.1% year over year, data from the Ministry of Finance showed.
South Korean vehicle exports to the US were valued at $40.01 billion in 2024, up 8.3% from 2023, data from the Ministry of Trade, Industry and Energy showed. Exports reached 1.5 million units in 2024, according to US Department of Commerce data.
China exported 106,592 units to the US in 2024, accounting for just 1.7% of China’s total vehicle exports, data from the US Department of Commerce showed.
Imports of China’s electric vehicles could face a steep rise in tariffs as the US already quadrupled tariffs on Chinese-origin EVs to 100% in September 2024, China-based sources said.
The US tariff hikes would intensify uncertainty in global trade markets, which could weaken China’s exports of manufactured goods, including vehicles, according to China-based steel market sources.
Europe
Tariffs on automobiles are likely to impact European steel producers and service centers linked to the auto industry, especially given the existing 25% tariffs on their products.
The auto industry is the second-largest consumer of steel, accounting for 17% of steel procurement in the EU.
Germany, the fifth-largest vehicle exporter to the US, shipped 446,556 cars to the US in 2024, making it the most-affected European country, followed by the UK and Slovakia.
Prices
Tariffs could potentially increase steel prices in the US due to reduced supply. Platts, part of S&P Global Commodity Insights, assessed the daily TSI US HRC index at $940/st on an ex-works basis on April 2, up 3% month over month.
European flat steel is likely to come under pressure as the US remains an important market.
Platts assessed HRC in Northwest Europe at Eur640/mt ex-works Ruhr April 2, up 4% month over month, while CRC prices in Northwest Europe were assessed up 3% month over month at Eur715/mt ex-works Ruhr.
HDG ex-works Ruhr prices were assessed at Eur725/mt April 2, with both HDG and CRC demand remaining poor amid weaker automotive and OEM purchasing and higher offers being reported.
China’s flat steel market, especially cold-rolled coil, is likely to be supported by robust vehicle manufacturing at least in the first half of 2025, led by domestic fiscal stimulus and a still-strong export market.
The average spread of Chinese domestic CRC prices to hot-rolled coil in Shanghai was Yuan 630/mt ($87/mt) on April 2, higher than Yuan 510/mt a year earlier, Platts data showed. The production cost to roll HRC into CRC is usually around Yuan 400-500/mt.
| Asia, Europe’s large presence in US as passenger vehicle exporters | |||||
| Countries | 2020 | 2021 | 2022 | 2023 | 2024 |
| Mexico | 21,86,483 | 21,34,494 | 22,80,577 | 26,44,089 | 29,61,598 |
| South Korea | 8,73,939 | 8,24,447 | 9,37,354 | 12,42,834 | 15,35,616 |
| Japan | 13,88,923 | 13,34,795 | 12,95,805 | 14,53,815 | 13,77,086 |
| Canada | 11,60,286 | 9,10,519 | 10,10,546 | 12,99,189 | 10,65,465 |
| Germany | 2,78,810 | 2,79,702 | 3,28,671 | 3,90,950 | 4,46,566 |
| China | 36,742 | 50,658 | 64,430 | 69,809 | 1,06,592 |
| United Kingdom | 1,34,081 | 1,29,584 | 81,510 | 73,705 | 96,451 |
| Slovakia | 68,424 | 61,340 | 71,640 | 99,575 | 93,301 |
| Sweden | 69,558 | 78,539 | 74,633 | 84,691 | 87,707 |
| Hungary | 36,629 | 36,981 | 36,381 | 48,482 | 53,828 |
| South Africa | 16,032 | 21,613 | 30,794 | 37,791 | 50,886 |
| Thailand | 19,866 | 20,557 | 19,508 | 17,833 | 35,615 |
| Belgium | 30,663 | 29,897 | 37,120 | 52,517 | 34,179 |
| Italy | 89,743 | 55,154 | 50,969 | 65,113 | 27,649 |
| Volume in units | |||||
| Source: US Department of Commerce, Bureau of the Census, Foreign Trade Division | |||||
Annalisa Villa | Jing Zhang | Market Specialist – Metals | Clement Choo | Lucy Tang | Market Specialist – Metals
EU, UK fine carmakers for recycling cartel
European carmakers have been fined €458 million ($495.6m) for participating in a 15-year cartel concerning end-of-life vehicle (ELV) recycling, Kallanish reports.
The European Commission said Tuesday that 16 major automakers and industry trade body ACEA entered into “anticompetitive agreements” and engaged in concerted practices related to vehicle recycling. The investigation was coordinated with the UK Competition and Markets Authority (CMA).
Thanks to Mercedes-Benz’s tip-off, officials in Brussels and London found that the parties agreed not to pay car dismantlers for processing ELVs and not to promote how much of an ELV can be recycled, recovered and reused.
“Their goal was to prevent consumers from considering recycling information when choosing a car, which could lower the pressure on companies to go beyond legal requirements,” the EC explains.
Japanese carmakers Honda, Mazda, Mitsubishi and Suzuki had a lower involvement, thus a smaller fine. Officials also granted a reduction to Renault since the French carmaker had previously asked to be exempted from the agreement not to advertise the use of recycled materials in new cars.
Stellantis, Mitsubishi and Ford benefitted from reductions of 50%, 30% and 20%, respectively, for their cooperation with the EC. Mercedes-Benz received full immunity for revealing the cartel, avoiding a fine of €35 million.
The investigation issued the biggest fine to Volkswagen at €127.7 million. Renault/Nissan followed with a penalty of €81.46m, while Stellantis (excluding Opel) was hit with a fine of €74.9m.
“Today, we have taken firm action against companies that colluded to prevent competition on recycling,” comments Teresa Ribera, EC vice president for Clean, Just and Competitive Transition. “We will not tolerate cartels of any kind, and that includes those that suppress customer awareness and demand for more environmental-friendly products.”
The official adds that high-quality recycling in key sectors such as automotive will be central to meeting the EU’s circular economy objectives, “not only to cut waste and emissions, but also to reduce dependencies, lower production costs and create a more sustainable and competitive industrial model in Europe”.
While ACEA was the facilitator of the cartel, its UK counterpart SMMT was also involved.
Separately, the CMA issued fines of over €77m to ten carmakers in the UK: BMW, Ford, Jaguar Land Rover, Peugeot, Citroen, Mitsubishi, Nissan, Renault, Toyota, Vauxhall and Volkswagen.
Under the so-called buyers’ cartel, the parties agreed among themselves how they would individually interact with suppliers. “In this case, the manufacturers involved mutually agreed the price that they would each individually pay for recycling services (zero), thereby preventing the providers of recycling services from negotiating a higher price,” the CMA explains.
Automakers should capitalize on upcoming green steel technologies to decarbonize industry, CALSTART says
The webinar, hosted by the non-profit organization, which has a focus on the development of efficient transport solutions, featured panelists from green iron and steelmakers Boston Metal, Electra and Stegra.
The automotive sector is a large consumer of steel produced via primary steelmaking, which is a highly emissions-intensive process, Gordon said on Thursday. The US market has a 30:70 split of primary steel and secondary steel, which involves using recycled steel and has far lower emissions due to the use of electricity.
The US produces about 20 million tons per year of primary steel, he said.
To match that capacity, CALSTART estimates that it would take 8-12 green steel facilities, developing a need to ramp-up green steel production by aggregating demand, Gordon said.
“Demand has such a massive effect on the investments that are made,” Gordon said. “When we make steel today, we release between 1.5 and 3 tons of [carbon dioxide] per ton of steel. To make green steel, we need to take the carbon dioxide [out].”
The decarbonization of steel concerns the decarbonizing of iron, Holger Koehler, head of strategy with clean iron company Electra, said.
“It’s not the electric-arc furnace [steelmaking process] that is novel,” he said. “It is really the direct use of iron with 100% hydrogen testing. It’s all about the iron-making, and that requires a partnership along the value chain that is absolutely critical.”
Electra intended to operate a commercial-scale green steel facility in Sweden by 2030. This will produce high-purity iron plate from low-grade iron ore using renewable energy and electrochemical processes. The company has a pilot plant already operating in Boulder, in the US state of Colorado.
Michael Lovgren, head of commercial metallics of Stegra, and Adam Rauwerdink, senior vice president of business development at Boston Metal, both highlighted the importance of collaboration and a robust supply chain in the development of the green steel market.
Stegra, previously H2 Green Steel, is building a large-scale green steel plant in Boden, Sweden, aiming for near-zero-emissions steel production using green hydrogen and renewable electricity, with operations scheduled to begin in 2027.
Meanwhile, Boston Metal will deploy its first demonstration plant relating to the scalability of molten oxide electrolysis (MOE) steel to achieve commercial production in 2026. MOE does not require coke production, iron ore sintering and pelletizing, blast furnace reduction or basic oxygen furnace refinement.
When it comes to accelerating the decarbonization of the steel industry, Lovgren noted the importance of collaborating with original equipment manufacturers to strengthen the supply chain, to create the demand for low carbon emissions steel.
“Where we definitely see the most value from automotive and some of these other early adopting markets is just stability of demand,” Rauwerdink said, “showing that the demand for green steel and low carbon emission steel is real, that it can survive the headlines of the day. That will allow the steel industry to make the capital allocations needed to really drive this change.”
Global decarbonization trajectory
Globally, the panelists highlighted China and India as markets to target when it comes to decarbonization, due to the mix of electric-arc furnace (EAF) and blast furnace (BF) steel production in those countries.
The global steel industry produces nearly 1.9 billion tonnes per year of steel, according to the World Economic Forum, and is a major contributor to greenhouse gas emissions.
“If your goal is to decarbonize 1.9 billion tpy of steel, something like 1.1 [billion tpy] of that is in India and China. So that’s certainly our priorities,” Rauwerdink said during the webinar. “The majority of the world’s blast furnaces are in China. So that’s going to be a critical market.
“India is… forecast to grow in terms of overall steel supply,” he added. “They’ll be putting assets into the ground that will have decades of life. That’s an important part of decarbonizing the future of steel.”
The decarbonization trajectory of the Chinese and Indian steel markets were likely to be prolonged, Holgren said, due to the relatively newer cadre of blast furnaces in these countries.
“Those fleets are relatively young,” Holgren said. “The Chinese and especially the Indian fleet are actually really young blast furnaces. So that will be a longer-term [objective].”
As recently as September 2024, Tata Steel commissioned India’s largest blast furnace.
Focusing on Asia, Lovgren highlighted that Japan and South Korea were bright spots for green steel demand.
“But again,” he said, “the fleet is younger, so the kind of demand from that perspective looks a bit different and it’s less mature.”
Spanish auto industry remains weak despite January recovery
The Spanish automotive sector increased both production and exports sequentially in January, Kallanish notes. Performance, however, remained weaker compared to the beginning of 2023.
“January began with the same downward trend that marked the end of 2024,” comments national automotive association Nacional de Fabricantes de Automóviles y Camiones (Anfac) president José López-Tafall. “While this is partly due to factory adjustments, including changes in work shifts and new model rollouts, we cannot overlook the overall decline in the sector at a critical moment for our industry.”
He emphasises the urgent need to stimulate demand, not just in Spain but across Europe, to safeguard competitiveness. “We must align all stakeholders, establish a short-term action plan, and develop a long-term sustainable strategy to ensure the industry’s competitiveness and drive innovation in electric vehicles, the only true growth driver for the sector,” he adds.
Production in January reached 168,076 units, compared with 139,203 vehicles in December. This volume, however, was down 27.2% on the same month in 2024. Of the total, 61.8% were gasoline and diesel-powered automobiles.
Spanish vehicle exports grew in December. Shipments were 145,170 units, up from 134,813 units in the previous month but 28% down compared to a year ago.
European markets had a 92.2% share in Spanish deliveries in January, 0.9 percentage points less on-month but 1 p.p. higher year-on-year, Anfac data show.
Todor Kirkov Bulgaria
Czech car production hits all-time high, Poland mixed
A slump in December could not prevent Czech passenger car production from rising 3.9% on-year in 2024 to 1.45 million vehicles, driven by 4.5% growth in exports, according to Czech Automotive Industry Association data seen by Kallanish. This was an all-time high.
Largest producer Skoda saw output rise 3.7% in 2024 to 896,933 units, while Toyota production surged 17% to 225,058 units. However, Hyundai saw production fall 2.8% to 330,890 vehicles.
The Czech Republic is Central and Eastern Europe’s largest car manufacturer, sourcing automotive steel from US Steel Kosice (USSK) and ArcelorMittal among other suppliers, and producing most cars for export.
Its 2024 performance flies in the face of the doom and gloom surrounding the European automotive industry last year. Passenger car production in largest EU carmaker Germany was stable on-year at 4.1m units (see separate story).
Passenger car production in neighbouring Poland however fared much worse, dropping 28% on-year in 2024 to only 216,200 vehicles, a multi-year low, according to Statistics Poland (GUS).
Polish truck production nevertheless grew 8% to 332,043 units, a multi-year high, while output of buses grew 39% to 7,103 units, the highest since 2019.
Adam Smith Poland