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If designed properly, low-carbon steel credits under the EU car CO₂ standards can create a lead market for green steel produced in Europe. Given the automotive sector’s large steel demand and purchasing power, the mechanism could support the scale-up and commercialisation of green steel projects, strengthen Europe’s industrial base and reduce the carbon footprint of vehicles.
T&E’s main policy asks:
Focus the mechanism on the cleanest steel pathways. From 2035 onwards, only fossil-free primary steel should qualify. Rewarding weaker or transitional pathways beyond 2035 would undermine the investment signal for genuinely near-zero steel.
Define eligible low-carbon steel strictly and quickly. The Commission should adopt a clear methodology under the ESPR and secondary legislation by the end of 2026 to define “low-carbon” steel, in order to give investors and carmakers regulatory certainty.
