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CLEPA | Commission takes a step in the recognition of automotive suppliers’ contribution to sustainable economy

  • Climate Delegated Act incorporates the production of powertrain components including e-motors, power electronics, thermal management and braking systems in its definition of sustainable economic activities
  • Critical activities are still at risk of being overlooked by capital markets

in CLEPA, 14-06-2023

The European taxonomy regulation aims to direct investments towards sustainable commercial activities. This means that, over the coming years, the sustainability level of each business activity will influence its access to funding. On 13 June, the European Commission presented new proposals for delegated acts that amend and complement the classification scheme for sustainable business activities. CLEPA welcomes this initiative and sees the delegated acts as a step forward in the acknowledgment of automotive suppliers’ contribution to a sustainable economy and their role in the advancement of green mobility in the EU.

Originally, the taxonomy regulation did not recognise the economic activities related to the production of e-mobility components as ‘sustainable’, while the assembly of electric vehicles was considered as such. The proposed amendment to the Climate Delegated Act will recognise a significant share of the manufacturing of powertrain components, including power electronics, thermal management and braking components, as contributing to the environmental performance of the car, if installed in a zero-emission vehicle. For automotive suppliers, the delegated act marks a crucial first step to improve the level playing field and secure funding for critical supply chain elements and zero-emission mobility.

The circularity chapter of the Delegated Act on non-climate environmental objectives gives much-needed recognition to the sustainability contribution of some aftermarket-related activities, but so far excludes the design for circularity and remains ambiguous on remanufacturing actions by automotive suppliers. As a result, critical activities by automotive suppliers remain at risk of being overlooked by capital markets and could suffer from underinvestment. The use of low carbon/recovered materials, lightweighting, and product robustness should be considered in future revisions of the taxonomy.

In order to establish a fair and level playing field within the automotive sector, future improvements are needed. Many automotive supply companies continue to face unequal competition with OEMs, who can claim eligibility for the revenue generated by a sold vehicle whose value is generated by all components, while the manufacturing activities of a large share of these components remains non-eligible.

Unless Member states or the European Parliament object to the publication, the delegated acts will enter into force after a period of four months. CLEPA stands ready to support the European Commission in the development of a comprehensive pathway towards a fair taxonomy that effectively recognises the valuable contributions of all automotive suppliers in mitigating climate change, preventing pollution, and promoting circularity.




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