EU Taxonomy

What is the Sustainable Finance Taxonomy and its purpose? 

The European Commission has published a green finance rulebook, that establishes a common language of what economic projects and initiatives are considered ‘sustainable’.


With this and other measures, the European Commission 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.  

What are the limitations of taxonomy as it currently stands?  

In order to apply the EU taxonomy to a rapidly evolving economic environment, the regulation provides a broad categorisation identifying ‘sustainable’ activities. The Commission provides guidance to companies and investors on how to interpret these categories through notices that can be amended, if needed, due to technological and economic developments.

The notice considers both the purchase of a zero-emission vehicle component and its installation in the car by a vehicle manufacturer as sustainable business activities, but does not recognise the production of that very same component as sustainable.

This approach will refrain investors from focusing on automotive supply companies, risking their innovation capacity in the midst of an unparalleled mobility transformation. 

How will a #FairTaxonomy enable a swift transition?

In order for automotive suppliers to be able to deliver sustainable solutions faster: 


• The European Commission should amend its notice so that economic activities related to component production are subject to the same conditions as the manufacturing or assembly of the final product, if their use in a zero-tailpipe emission vehicle can be verified.


• Additional measures may also be needed for enabling activities upstream in the supply chain, which have a degree of separation but are indirectly linked to the assembly of the final product.   


The transition to carbon-neutral mobility will not succeed without the contribution of the entire supply chain. Automotive suppliers are asking for a fair taxonomy that equally recognises sustainable activities within sectors and facilitates investments along the supply chain to ensure the success of the green transition. 

The EU Sustainable Finance Taxonomy should recognise the role played by automotive suppliers. In the current delegated act, EV component production is not eligible as sustainable investment, as is the case for vehicle assembly. Key R&D and manufacturing activities of technologies related to EVs may find it harder to be recognised as sustainable investments, where activities related to the assembly of the vehicles are. This could reduce the required funding towards critical innovation, and puts at risk the success of the transition.

Benjamin Krieger

CLEPA Secretary General

Industry leaders call for a #FairTaxonomy

Electromobility and mobility transition

of the cost to produce each electric vehicle comes from its components
of total R&D investments come from automotive suppliers.
€20 billion
is what automotive suppliers annually invest in capital expenditures (machinery, plants) and R&D, to deliver e-mobility. 

Zero-emission vehicles are systems of components, from powertrain and electronic architecture to interior and exterior design. If these cars are considered ‘sustainable’, shouldn’t the approach be the same for their parts? 
Skills for the future
According to the last CLEPA Pulse Check, 78% of auto suppliers are committed to upskilling/reskilling their workforce.