Car industry rejects EU green steel quotas amid decarbonisation debate

European carmakers have expressed strong opposition to proposals for mandatory minimum quotas for green steel usage, arguing that market-driven solutions are more effective for decarbonising steel production. This stance comes in response to suggestions from steelmakers, environmental groups, and German politicians, who believe that the automotive sector is well-positioned to lead the transition to green materials. The German car industry association VDA emphasized that the shift to green steel is a long-term endeavor that requires support for investment costs rather than regulatory mandates. The automotive sector's unique position stems from its reliance on high-quality flat products, which are predominantly produced using coal-based steel. Environmental advocates argue that premium car brands could absorb the additional costs associated with green steel, thus facilitating a market for cleaner materials. However, the VDA cautioned that estimating the financial implications of such quotas is complex due to various influencing factors. While some political factions support the idea of a small quota to stimulate an international market and reduce carbon footprints, the German car industry remains skeptical. They argue that the current decarbonisation plans of European steelmakers only address a fraction of the region's primary steel production, highlighting the need for more substantial investment and support. In conclusion, the debate over green steel quotas reflects broader tensions between regulatory approaches and market-driven solutions in the automotive and steel industries, with significant implications for the future of decarbonisation efforts in Europe.