Germany considers leniency on emissions limits for carmakers that use green steel made in the EU – sources

The German government is examining the idea of relaxing EU CO2 fleet emission limits for carmakers that use green steel made in Europe in their production, business daily Handelsblatt reported based on government sources. This would allow companies to contribute to climate action by avoiding the use of emissions-intensive steel from other world regions, such as China.

However, the government sources also said talks on such a proposal were at a very early stage and that introducing such a scheme would be complicated. It would require an agreement at EU level, and it would be costly to check supply chains to ensure that green steel from Europe is actually used. In addition, industry sources criticised the idea, saying domestically produced green steel would be much more expensive and could therefore put companies at a competitive disadvantage.

Carmakers in Europe have annual specific emission targets for their car fleets to help reduce emissions in the transport sector. They were eased for 2025 to support a struggling industry.

Germany’s car industry, one of the country’s largest industrial sectors, is struggling with low sales, increasing Chinese competition, US tariffs, and the transition to electric vehicles. Several suppliers announced plans in the past weeks to cut thousands of jobs in response to the sector's challenges.

In response, the German government will convene a “car summit” on 9 October with industry leaders, unions and regional officials to discuss ways to address the car industry’s crisis.