Climate Change & Natural Capital (AO) | Made in Europe: ArcelorMittal, Stellantis, VW, Umicore, BASF, Norsk Hydro and other interventions

Research evidence excerpt

Climate Change & Natural Capital (AO) | Made in Europe: ArcelorMittal, Stellantis, VW, Umicore, BASF, Norsk Hydro and other interventions

for the

production and use of chemicals derived from sustainable carbon sources.

While the IAA is complex and cross-sectoral, the most affected sector is the automotive sector and its value chain, including

batteries. Steel and aluminium producers will also get a boost, but the definition of "low-carbon" is yet to be defined.

We are still early on in the negotiating process, with no formal positions from the Council or the Parliament. Meanwhile, the

Commission ran a public feedback (11 March -18 June) to help inform the process. Nearly 430 groups and people responded.

The ongoing EU deliberations on a new Chinese trade policy will clearly have an impact on both the pace and the outcome of the

negotiations. The IAA is largely targeted at curbing Chinese dominance of low-carbon tech in Europe, as made-in-China products

would not have access to public procurement/ public support schemes, and Chinese investors face new FDI restrictions.

The EU is building up production capacity, but still heavily imports from China. In 2025, it had a EUR54bn low-carbon technology

trade deficit with China, according to Bruegel, with batteries (50%), EVs (18%), chargers (13%), and solar (14%) dominating trade.

Chart 1:Annual nameplate capacity (Q4 2025) vs latest year demand Chart 2:EU net trade with China: selected low-carbon tech (EURbn)

(2025)

Source: Kepler Cheuvreux, Bruegel Source: Kepler Cheuvreux, Bruegel

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