CLEPA’s Materials Regulations and Sustainability event unites stakeholders to drive sustainability in the automotive supply industry

CLEPA, the European association representing the automotive supply industry, successfully concluded its 15th edition of the Materials Regulations and Sustainability event. After three online editions, the event, which took place in Stuttgart, brought together a diverse range of stakeholders, including experts in materials, chemicals, and ecodesign, as well as regulators and industry leaders in corporate sustainability and reporting. Over the course of two days, more than 200 participants gained insights into the latest regulatory and legislative developments impacting the automotive supply industry.

in CLEPA, 26-05-2023

The key message coming out of the event was fostering cooperation across the value chain and across regions, but the challenges were also made clear. The industry is facing considerable uncertainty due to regulatory delays, ambiguities in criteria and definitions, and the necessary trade-offs between chemical restrictions, circularity and sustainability.

The conference was also an opportunity to highlight the industry’s initiatives and achievements. In his opening remarks, CLEPA’s Secretary General, Benjamin Krieger, stated: “Automotive suppliers are driving sustainable solutions through smart investments, circular product design, technology diversity, and global partnerships.” He went on to say: “While we acknowledge the challenges, we are equally aware of the new business opportunities, which will increase demand for new skills and tools, as well as the best engineers and IT experts – together building the cars of the future.”

Chemicals regulations will come at a cost to the industry, but predictability can help the transition

The European Commission outlined the progress and implementation status of the Chemical Strategy for Sustainability (CSS), emphasising that its execution, particularly the generic restrictions of REACH, will incur costs for the industry and turnover will be negatively impacted. The Commission agreed that more predictability will be key for success. A representative from the chemicals industry association CEFIC also highlighted the need for clarity, a workable timeline for implementation, simplification of existing bottlenecks and support for SMEs. During the first day, the audience learned that as it stands, the proposed PFAS restriction is a serious threat to the automotive industry and the European Green Deal. The automotive industry is planning a two-step approach to the consultation with a first submission before the summer break and a second before the deadline in September.

Suppliers anticipate the unveiling of the revised End of Life Vehicle Directive (ELVD)

The automotive industry’s commitment to Circularity measures was another prominent theme. The European Commission shared a sneak-peak of what the industry can expect for the revision of the ELVD, slated for June 2023, highlighting the issue of missing vehicles, extended scope to new vehicle classes, and mandatory recycled content quotas as key considerations. The Commission also noted its intention to turn the Directive into a Regulation. The industry emphasised the importance of getting the framework right and scaling up recycling technologies while ensuring feasibility and reduced environmental impact. The challenge of defining Substances of Concern (SoCs) based on their impact on recycling was also discussed, along with concerns about the “no data, no market” principle.
The impact of the transition on circularity was also identified as a priority for R&D. Several engaging presentations showcased the work of relevant EU-funded projects. Notably, a representative from the CIRPASS project shared key takeaways derived from mapping various Digital Product Passport (DPP) initiatives and platforms, shedding light on the path to fostering innovation and driving sustainability through R&D efforts.

Critical Raw Materials access will be a key challenge in the upcoming years

The Commission projects a staggering uptick in demand for lithium in batteries in the EU, set to grow to 12 times the current demand by 2030 and an astounding 21 times by 2050. Recognising the importance of securing a sustainable supply of critical raw materials, the Critical Raw Materials Act (CRMA) seeks to address this pressing issue. However, several challenges must be tackled, including scaling up sustainable extraction, processing and manufacturing of material, as well as providing sufficient quality of secondary materials. CLEPA highlighted the importance of forging strategic partnerships to overcome dependencies, as well as conducting risk assessments and mitigation for conflict affected and high-risk areas, where data emerges as an essential element given the complexity of the automotive supply chain.

Harmonisation of sustainability policies and initiatives is needed to streamline industry efforts

The event also focused on automotive sustainability initiatives and tools, in particular, Corporate Social Responsibility, due diligence and their respective legislative files. Guest speakers from CSR Europe, Responsible Business Alliance and Responsible Supply Chain Initiative shared their insights on sustainability reporting and auditing in the automotive industry and concluded that there is a strong need to streamline these different mechanisms and requirements for suppliers.
Another key aspect of automotive sustainability is a Product’s Carbon Footprint (PCF). With the increasing electrification of vehicles there is an urgent need for a harmonised methodology for PCF quantification. Distinguished speakers from A-PACT, Catena-X, and UNECE IWG A-LCA provided valuable insights into the planned initiatives aimed at enabling the collection, compilation, inter-exchange, and reporting of actual carbon footprint data. It was emphasised that globally accepted calculation guidelines and common tools are essential for accurate PCF calculation. This message was further reiterated during the IMDS session of the event, highlighting the integration of PCFs into IMDS and the intention to utilise the Catena-X PCF Rulebook as a foundational resource.



CLEPA | Automotive suppliers cautiously optimistic despite continuing pressure on profit margins

  • CLEPA and McKinsey’s semi-annual survey shows nearly half of suppliers expect profits to remain low, with nearly one-quarter expecting losses in 2023
  • General outlook is more positive compared to 6 months ago; 35 percent of suppliers are optimistic about the future, while 35 percent remain concerned
  • Business activities in China are both a strategic priority and challenge, with 45 percent of European suppliers involved from a moderate to great extent

in CLEPA, 23-05-2023

Europe’s automotive suppliers are regaining some of their optimism about the future, according to the latest Pulse Check survey conducted by CLEPA and McKinsey in February 2023. While almost half of the surveyed suppliers anticipate low profit margins, the general outlook is good, with 35 percent expecting positive market growth.

This indicates a significant shift in sentiment from the last survey conducted in the fall of 2022, when 70 percent of suppliers had a pessimistic outlook. This mood change is mainly due to the prospect of higher revenue, expected by two thirds of suppliers surveyed. At the same time, profits remain a source for concern, as nearly half (43 percent) of suppliers expect a low EBIT margin of just 1 to 5 percent with only one quarter expecting their profits to climb higher.

“Despite the overall improvement in sentiment compared to six months ago, the pressure on supplier profits remains a key concern for the industry,” says Andreas Venus, Senior Partner at McKinsey. “After two difficult years, the mood in the industry is lifting a bit but it’s too early to assume the risks have been completely overcome.”

To address this, many suppliers remain focused on improving profits by exploring three levers: having manufacturers compensate added costs to the suppliers, monitoring direct and indirect costs even better, and adapting their product portfolios. Although many companies have managed to adjust their prices and enhance supply-chain resilience while also shifting towards e-mobility, there are still persistent concerns among industry players regarding the potential for a recession and an uncertain inflationary environment. However, an increasing number of suppliers are actively pursuing long-term challenges and are exploring new investment opportunities to foster future growth.

“The results of the Pulse Check affirm the automotive supply industry’s dedication to investing in innovation,” states Benjamin Krieger, CLEPA Secretary General. “The shift in mobility and the transition towards green technologies present exciting prospects for automotive suppliers. However, the competitiveness of the EU as an investment destination and the accessibility and adequacy of capital to fund these investments remain significant concerns.”

Investment needs and access to skilled workers are a major strategic challenge. Despite profitability pressures, a minority of suppliers is looking to reduce investments (37 percent) or R&D expenses (18 percent). In terms of personnel acquisition, engineers remain the most sought-after group – 76 percent of suppliers say that finding and hiring these employees has become more difficult in the last five years. Demand is also still high for software developers (38 percent) and sourcing experts (35 percent).

The importance of establishing and expanding business relationships with customers in the Chinese market continues to increase, adding an additional layer of complexity and opportunity for automotive suppliers. Doing business in China is a top strategic priority for suppliers, with 45 percent involved from a moderate to great extent, and accounting for around 10 percent of business revenue. If supply chains are considered, two thirds of companies are highly dependent on China. However, just under 40 percent of suppliers have taken concrete steps to manage the potential risks of doing business in the country.




  • CLEPA represents over 3,000 companies supplying state-of-the-art components and innovative technology for safe, smart and sustainable mobility, investing over €30 billion yearly in research and development. Automotive suppliers directly employ about 1.7 million people in Europe.

About McKinsey

  • McKinsey is a global management consulting firm committed to helping organizations accelerate sustainable and inclusive growth. We work with clients across the private, public, and social sectors to solve complex problems and create positive change for all their stakeholders. We combine bold strategies and transformative technologies to help organizations innovate more sustainably, achieve lasting gains in performance, and build workforces that will thrive for this generation and the next.



CLEPA | Coalition of steel users calls for termination of EU Steel Safeguard Measures

A cross-sectoral industry coalition of European steel users calls on the European Commission to terminate the EU steel safeguard measures as part of the ongoing review to be concluded by 30 June 2023.

in CLEPA, 10-05-2023

The safeguard measures constitute an unnecessary and burdensome restriction on our industries’ access to steel, which ultimately hampers Europe’s net-zero transition and our international and domestic competitiveness. Additionally, as shown by the recent WTO dispute brought by Türkiye against the EU steel safeguard measures, there are in fact legitimate doubts as to whether steel imports have ever represented a serious threat for the EU steel industry.

The growth prospects of our industries are currently threatened by an increasingly volatile international environment, which has resulted throughout several years in large fluctuations in steel prices and significant disruptions to our steel supply chains. Additionally, the upcoming Carbon Border Adjustment Mechanism (CBAM) will result in higher steel input costs for our industries, which will continue to face competition from third-country downstream goods that are not subject to CBAM. Our industries must have the necessary flexibility to source steel both on the domestic EU market and from third countries, given its importance as an essential manufacturing input. Such flexibility is necessary to (1) manage increasingly frequent supply chain disruptions (2) source at reasonable prices to maintain our industries’ international and domestic competitiveness and (3) source steel with low embedded carbon emissions to meet our customers’ growing sustainability requirements.

In the light of the above, the system of quotas created by the safeguard measures constitutes an unjustified burden for European steel users, hampering their ability to manage the challenges of the current volatile international environment. In particular, our industries have reported the following:

  • Multiple individual quota allocations for specific countries and product categories are insufficient and are therefore quickly exhausted, forcing companies to pay the 25% out-of-quota duty.
  • Many key steel products are not produced in sufficient quantities in the EU and announced investments will not be enough to meet future demand. This is particularly problematic for steel products required to enable the EU’s green transition.
  • Importing steel under the quota system represents a considerable administrative burden and a complex task, which is especially unfair to SMEs.

Our industries are aware of the many challenges that the steel industry is currently facing globally (e.g. overcapacity issues, high energy prices, etc.). We also remain supportive of targeted interventions aimed at helping the steel industry to decarbonise. However, we do not believe that the steel safeguard measures are the appropriate instrument to address any of the challenges faced by the steel industry.

Therefore, to foster the expected growth of our industries and to avoid hampering the EU’s twin transition to a green and digital economy, it is imperative that the European Commission terminates the steel safeguard measures by 30 June 2023.



CLEPA calls for new approach to EU’s net-zero industry

CLEPA calls for holistic industrial approach for the manufacturing of green and smart technologies

  • The measures of the Net Zero Industry Act (NZIA) are a step forward but fall short of enabling a competitive net zero industry
  • CLEPA calls for a holistic industrial strategy supported by public funding to scale innovations that serve green & smart objectives

in CLEPA, 10-05-2023

The European Commission’s proposed Net Zero Industry Act (NZIA) aims to scale up the manufacturing of net zero technologies in the EU, in support of the green energy transition. While the NZIA is a positive step forward, a successful green transition will require full use of all digital capabilities, including smart manufacturing and mobility, to safeguard Europe’s industrial competitiveness and prosperity.

In its new paper, CLEPA proposes the integration of the NZIA into a broader holistic industrial strategy, including encompassing state aid reform, reduced regulatory burden, and the provision of enabling conditions for the green and digital transition. The centrepiece of the industrial strategy should be a five-to-ten year funding instrument aligned with the objectives of the 14 industrial ecosystems and six critical value chains identified in 2021.

Read CLEPA’s Paper on Net Zero Industry Act and State Aid Reform