Germany's Olaf Scholz Urges Unified EU Support for EVs and Steelmakers

Scholz

German Chancellor Olaf Scholz has called on the European Union (EU) to implement comprehensive measures to boost electric vehicle (EV) manufacturing and protect its steel industry from overcapacity and dumping. Speaking at an EU leaders' meeting, Scholz emphasized the importance of collaboration within the bloc and avoiding conflicts with major trading partners like China.

Scholz specifically urged Brussels to seek a "good conclusion" with Beijing regarding countervailing duties on Chinese battery electric vehicle (BEV) imports. EU negotiators are exploring a price commitment mechanism to address concerns about cheap imports, but Scholz opposed punitive duties, arguing, "It makes no sense having a conflict about this."

EV Manufacturing and Emissions Targets

To support European carmakers, Scholz proposed that the EU reconsider its stringent greenhouse gas (GHG) emissions targets for light passenger vehicles. The upcoming target of 93.6g CO2/km for 2025-2029, a 15% reduction from 2021 levels, has faced criticism for its ambitious timelines. Scholz suggested easing penalties for automakers unable to meet these requirements by 2025, stating, "It makes no sense to burden [car manufacturers] with additional penalties for not achieving results."

The targets will tighten further, reaching 49.5g CO2/km from 2030-2034 and zero emissions by 2035, effectively banning internal combustion engine vehicles. Scholz called for a balanced approach, ensuring that penalties do not hinder firms’ liquidity, especially as they ramp up investments in electro-mobility.

Additionally, Scholz proposed a "common subsidy concept" across EU member states to stimulate EV production and enhance Europe’s competitiveness in the global automotive market.

Addressing Steel Industry Challenges

Scholz also highlighted the urgent need for the EU to tackle overcapacity, dumping, and the influx of cheap steel imports that threaten European steelmakers. He advocated for a unified strategy to safeguard the bloc's industrial base, underscoring the strategic importance of the steel sector to the EU's economy and energy transition goals.