Today, ahead of the pivotal European Council meeting, the European steel and automotive industries—represented by the European Automobile Manufacturers’ Association (ACEA) and the European Steel Association (EUROFER)—have issued a coordinated call for a realistic and pragmatic approach to industrial transformation. This development has significant implications for the entire European manufacturing value chain, touching everything from supply chain resilience and R&D prioritisation to strategic employment and environmental objectives.

The joint statement underscores the deep interdependence of Europe's steel and automotive sectors. Together, they form two of EU’s industrial pillars, supporting over 15 million jobs across the continent—13 million in automotive and 2.5 million in steel, both directly and indirectly. The automotive industry remains the second-largest consumer of steel in Europe, and a substantial share of steel producers’ R&D spending is directly linked to automotive applications. This symbiotic relationship magnifies the effect of policy shifts, trade disruptions, and regulatory changes across both sectors.

Both industries currently face major overlapping challenges, including persistent global steel overcapacity—primarily driven by excess production in other regions such as China—together with high energy and carbon costs, and weak domestic demand. These challenges are further exacerbated by the inflationary energy market, elevated carbon emission prices under the EU ETS, and the complexities associated with the Carbon Border Adjustment Mechanism (CBAM). While Europe’s car market is slowly recovering from the impact of the pandemic, both sectors stress that greater action from policymakers is required to revitalise industrial competitiveness and safeguard long-term investment.

Specifically, ACEA and EUROFER are urging EU leaders to use this week’s Council meeting as an opportunity to convert the EU’s climate and industrial ambitions into concrete policies that both protect jobs and stimulate investment. Henrik Adam, president of EUROFER, emphasised that robust domestic steel production is “vital for the supply chain resilience of the EU automotive industry.” Similarly, ACEA president Ola Källenius pointed out that “competitive European cars are not possible without competitive European steel,” suggesting that regulatory frameworks should actively reward automakers who proactively source low-carbon steels as part of their climate strategies.

The statement reinforces the objectives of the European Action Plans being debated in Brussels, which look to align industrial policy with Europe’s climate goals, support decarbonised production, and upgrade supply chain resilience. Key recommendations include the implementation of smart regulation that aligns with both climate ambition and industrial strength, targeted support for innovation in low-CO2 steelmaking, and the development of mechanisms that reward voluntary commitments from OEMs and steel producers alike. Both associations stress the need for frameworks that can ensure the sustainability and competitiveness of Europe’s entire manufacturing base amidst aggressive global competition and tightening environmental standards.

The explicit link to decarbonisation is of paramount importance, as the EU shifts towards green public procurement, the expansion and strengthening of the CBAM, and broader policies to incentivise the production and use of low-emission steel. Industry leaders are clear that pragmatic steps and supportive policies are required to maintain Europe's status as a global industrial powerhouse, ensure ongoing innovation across sectors, and achieve the EU’s long-term environmental goals.

Taken together, today’s joint statement serves as both a wake-up call and a roadmap for policymakers: only with clear, realistic, and sector-sensitive action can the EU secure the future of its steel and automotive industries in a rapidly shifting global landscape.