BRUSSELS — France and Germany said Friday they had struck a deal to favor European-made cars under a landmark EU industry bill in exchange for weakening a 2035 vehicle emissions target, ending months of wrangling between the bloc’s two biggest economies.
Under the agreement, Germany would accept stricter “Made in Europe” — or local content — requirements for the automotive industry in the proposed Industrial Accelerator Act, a longstanding French demand, while France would back Berlin’s push to relax the EU’s plan to phase out new combustion-engine cars.
The EU’s current target is for companies to reduce emissions from new vehicles by 100% from 2021 levels by 2035, with the possibility to “earn” 10% of emissions leeway through initiatives like offsets and investments.
France and Germany now want to soften the 2035 target to 90% but without having to offer investments in alternative fuels to compensate the remaining 10%, as proposed by the European Commission.
“This balanced approach will enable the European Union to pursue its climate objectives while strengthening the technological sovereignty, industrial base and international competitiveness of its automotive industry,” the two countries said in a joint statement.
“We hope that this Franco-German dynamic can swiftly lead to an agreement with our partners, for our jobs and our industry,” French President Emmanuel Macron said in a post on social media.
An Elysée official on Friday made clear that, under the Franco-German deal, the scope of Made in Europe for automotive can be extended to the U.K. and Switzerland under certain conditions. — addressing a key concern of Prime Minister Andy Burnham’s government ahead of a Nov. 20 U.K.-EU summit in Brussels.
The agreement was reached after the German Social Democratic Party, the junior partner in Chancellor Friedrich Merz’s coalition government, dropped its opposition.
“This is a modern realignment of German industrial policy that places significantly greater emphasis on preserving jobs and production sites,” said German Environment Minister Carsten Schneider, who is from the SPD.
“The clear expectation for German companies is that they will use these new opportunities to make investments and guarantee jobs here in Germany,” he added.
CORRECTION: This article was updated on Oct. 16 after an earlier version misrepresented the figures in the Franco-German proposal on the softening of 2035 targets.
EU capitals must be able to intervene to stop new legislation from Brussels if they say it’s too burdensome for governments and businesses, the leaders of Germany, Italy and Belgium wrote on Monday.
In a letter addressed to European Council President António Costa and seen by POLITICO, the three leaders said the bloc needs an “emergency brake” mechanism to help boost its flagging economic competitiveness.
German Chancellor Friedrich Merz, Italian Prime Minister Giorgia Meloni and Belgian Prime Minister Bart de Wever also called to “significantly accelerate planning and approval procedures,” suspend “certain regulatory areas for a specified period” under a new “priority rule.”
“We call for further ambitious simplification packages to decisively advance the cutting of red tape in the European Union,” they wrote, adding that the Commission must ease the burden “first and foremost” on small and medium-sized businesses.
“More broadly,” the letter reads, “our common objective should be to prevent unnecessary regulatory burdens and related costs from causing permanent losses of European industrial capacity and further weakening investment and competitiveness.”
Coming days before an EU leaders’ meeting, the call echoes demands first stated in March after a summit focused on European competitiveness, and it comes amid worsening signs for the bloc’s industrial sector.
Leaders will debate the EU’s long-term budget, energy prices, and support for Ukraine when they gather in Brussels on Thursday for a two-day European Council summit.
European organizations have to reckon with how to keep up with the modern world without sacrificing sovereignty. Geopolitical instability, tightening regulatory expectations and the rapid adoption of artificial intelligence (AI) mean that, for many organizations, sovereignty now sits alongside resilience and business continuity in board-level risk discussions. The question they can no longer defer is how to harness the opportunities of the modern cloud without surrendering control over their own data. Answering it requires honesty about what sovereignty means, and about where it can actually be found.
A definition Europe can trust
The European Commission’s forthcoming Cloud and AI Development Act (CADA) is the right vehicle for that honesty: giving Europe a shared, enforceable definition of what “sovereign” actually means. Without such a definition, the market is filled with commercial offerings that claim the sovereignty label without delivering the substance, a practice described as “sovereignty washing.” This gap has led some organizations to treat open source as the answer. But open source software is a licensing model, not an operating model, and it doesn’t settle questions about infrastructure or jurisdiction or even reliability and access. It’s not a route out of dependency, it’s a different dependency on project sponsors and code maintainers. A definition gives policymakers a way to properly assess claims of sovereignty against a consistent standard rather than taking marketing at face value.
Europe should not wait for CADA to take effect before acting, though. European cloud service providers (CSPs) have been partnering with established technology providers to deliver real sovereign capability, without rebuilding the entire technology stack from scratch.
The best time to plant the sovereign tree was 10 years ago
If Europe wants to grow its industrial base, it has to support the ecosystem as it is now, not as it may in 10 years’ time. CADA’s own roadmap assumes roughly five to seven years to triple the EU’s data-center capacity. Providers who have already built capacity by blending EU capabilities with proven non-EU technologies would have to spend the intervening years relinquishing their growth. It is scale, not a shortage of skills or innovation, that is the biggest practical obstacle facing a stronger European cloud market. This is precisely why partnership with proven technology sources deserves a central place in the sovereignty debate rather than being treated as a second-best option.
Partnership shortens that timeline considerably, letting European CSPs deliver sovereign, scaled services now instead of waiting for domestic capacity to catch up organically. In Italy, IPZS, owned by the Italian Ministry of Economy and Finance, is using this model to build a modern Digital Application Platform for the Italian EUDI wallet, a foundational EU digital identity initiative. It provides a live example of that model working in Europe today, at the scale and speed the policy window demands.
It is through scale that the local industrial base can deliver sovereign capabilities, compete, capture market share, and invest in developing and integrating home-grown technologies. Hoping for the alternative to happen, that is for a European technological stack to fully emerge and be adopted, is the equivalent of putting the cart before the horse.
The rules need to allow for a model that’s already working
Providers, such as evoila, are now operating well beyond Europe’s borders, alongside Uniserver. This shows the model working at a broader scale, combining local operational and jurisdictional control with proven technology. Sovereignty spans jurisdictional, technological, operational and supply-chain dimensions, and a partnership model can address all four while drawing on technology already proven at scale, rather than asking every layer to be rebuilt from first principles by a single European provider.
Alongside its cloud platform, developed in-house and operated from data centers in Europe under EU jurisdiction, IONOS also offers customers a dedicated VMware-based private cloud. It is also operated within the EU and designed to provide European data sovereignty and operational control.
Broadcom’s role in that model is deliberately narrow. It supplies the VMware cloud software layer to the CSP, while the CSP itself runs the infrastructure and holds the customer relationship, so that no European customer data passes through Broadcom or is subject to its access. Trust, in this model, follows the architecture rather than the brand. If CADA’s tiers implicitly assume that sovereignty can only be delivered by a fully European-built stack, CADA would shut out precisely the route that is already allowing Europe to scale fastest: partnership between local operators and proven technology providers.
The path forward
Europe does not have to choose between moving quickly and building sovereignty. The two are compatible, provided the legislation is calibrated to recognize it. As the European Parliament and European Council work on CADA, the priority should be for it to recognize and reward the partnership models already delivering sovereign capability across Europe today.
The above column is sponsor-generated content.
Disclaimer
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The political advertisement is linked to Broadcom’s software business and advocacy around the Cloud and AI Development Act (CADA).
BRUSSELS — It was meant to be Europe’s escape from the web of Chinese critical mineral supremacy.
But two years after it took effect, the EU’s Critical Raw Materials Act is not on schedule. Just one in four critical mineral projects granted special status under the law is on track to be ready on time, according to new analysis shared with POLITICO.
On Friday, EU industry chief Stéphane Séjourné will unveil a new list of critical mineral projects that will receive privileged access to funding, accelerated permitting and help from Brussels to find buyers.
The idea is to make Europe a major producer of materials essential to clean energy, tech, and defense manufacturing. It’s currently a heavy importer.
But progress on the first round of 47 projects, announced early last year, offers little hope for the bloc’s ambitions.
“At least one in three mining and processing strategic projects is either late, stalled, at risk, or no longer exists, and only about a quarter are clearly on track,” said Diego Marin, policy officer for raw materials at the European Environmental Bureau, citing publicly available sources. The findings will be published in a report later this month.
Financial, regulatory, and political hurdles are blocking European mining projects, the industry says, despite the Critical Raw Materials Act’s aim to speed up the time it takes to get the shovels in the ground.
The EEB’s findings were echoed in an industry call in August, where 23 projects named in the first round claimed some were facing “immediate jeopardy,” in a letter sent to the Commission and obtained by POLITICO.
Those same companies also believe that announcing more strategic projects will create more problems. However, a Commission official dismissed that claim, saying that some of those projects had received direct funding from the Commission, and claiming the companies believe new projects would “dilute their status.”
The EU unveiled 47 projects in March 2025, covering 14 of the bloc’s 17 designated strategic raw materials—from lithium, nickel, cobalt and graphite for electric vehicle batteries and rare earths for magnets used in wind turbines, to tungsten for military equipment and gallium for semiconductors. It also includes 13 projects from outside the bloc.
These were designed to deliver the EU’s raw materials targets: by 2030, the bloc aims to mine at least 10 percent, process 40 percent and recycle 25 percent of its own needs, while sourcing no more than 65 percent of any one material at any processing stage from a single non-EU country.
Breaking Europe’s dependence on China for key metals is at the heart of the policy, a goal European Commission President Ursula von der Leyen highlighted in her State of the Union speech last month. “We are more than 80% dependent on China for many critical raw materials [and] 90% for some rare earths,” she lamented.
Outgoing Euromines president and former CEO of Swedish miner LKAB Jan Moström, who says Europe is a long way from meeting its targtets, in an interview at the 2025 European Industry Summit in Antwerp. | John Thys/AFP via Getty Images
A Commission official said that if all goes to plan, the EU will meet its 2030 goals for lithium, cobalt and rare earths, but results for other materials are mixed, with shortfalls in nickel processing and recycling and across the manganese supply chain. They did not give hard figures, though.
Industry skeptical
“Unless something happens that is absolutely not foreseen today, we will be far, far away from reaching the targets, even if they are quite low,” said Jan Moström, former CEO of Swedish mining giant LKAB and outgoing president of Euromines. He said better access to financing and faster permitting was key.
The EU is under additional time pressure as a pause on China’s export controls on rare earth minerals is due to expire in January.
Global think tank ODI found in June that “out of 60 projects, 14 are unlikely to contribute by 2030 because their estimated start of production falls between 2029 and 2031,” and that “three out of four are either behind their expected schedule or impossible to verify using up-to-date public evidence” — backing up the EEB’s numbers.
A European Court of Auditors report this year also revealed that “many projects will struggle to secure supply for the EU by 2030” and that there was “no proper tracking of results.”
The European Commission questioned the current validity of the ECA’s findings, saying it “audited a period of policy that does not cover everything we’ve done since this mandate. So the Court of Auditors had very relevant points that we took into account in our policy, but should absolutely not be seen as a fair assessment of the work we’ve done with the von der Leyen Commission number two,” said a Commission official.
Desperate times
Since adopting the Critical Raw Materials Act in 2024, Brussels has rolled out a flurry of initiatives to get projects moving. They include a proposed critical raw materials center, for which Parliament is seeking €2 billion; the “RESourceEU” plan that’s mobilized more than €2 billion; a mechanism to identify suppliers; and plans to revise water rules and speed up environmental impact assessments.
But industry leaders say the EU is moving too slowly.
“I’m still to be convinced that it makes any difference,” Michael Staffas, CEO of Swedish miner Boliden, told POLITICO when asked about the benefits of being designated as a strategic project. Boliden’s subsidiary Somincor was granted strategic status for a copper and zinc mine in Portugal.
The “strategic project” label promised faster permitting and help securing public and private finance, with permitting deadlines of 27 months for mines and 15 months for processing and recycling projects.
“In Sweden you have different authorities that can basically object to a permit process and that in itself creates way longer time than 27 months, just the legislation,” said LKAB CEO Johan Menckel, whose company currently has three strategic projects.
One is the Per Geijer deposit, home to Europe’s largest rare-earth deposits, which the local indigenous Sámi community opposes, arguing it would harm their reindeer-herding tradition.
A 2023 view from the highest point of the Covas de Barroso complex in Portugal, the site of Europe’s largest lithium deposit. | Henrique Campos/Hans Lucas/AFP via Getty Images
Karin K Niia, a Sámi reindeer herder, said in comments that the EU will be complicit in cultural genocide if the project goes ahead.
Europe’s lithium hope
Europe’s biggest bet to escape China’s foothold in battery metal supply chains is the Barroso lithium mine in Portugal, run by UK-based mining company Savannah Resources. The company says the mine could supply enough lithium for around half a million electric-vehicle batteries a year.
“I don’t think the strategic project stamp and the [Critical Raw Materials Act] have been absolutely essential, but it wasn’t also supposed to be. It was supposed to, in my understanding, be important to set a framework under which Europe can do the right thing faster, better, and for the better benefit of the next generation of Europe,” Savannah’s CEO Emanuel Proença said, calling it just another piece of a very big puzzle.
Europe’s lithium-refining ambitions are also faltering: France’s Viridian Lithium went bankrupt after failing to secure funding, while Portugal’s José de Mello Group was unable to finance its planned €492 million refinery — despite both projects winning strategic status in the EU’s first round.
Viridian Lithium spokesperson Luc Pez said the strategic project label was a ‘curse.’
Rio Tinto’s Jadar project in Serbia, one of the non-EU projects to gain strategic-project status, was meant to provide double Barroso’s lithium capacity and cater to up to 25 percent of Europe’s demand. That, however, was suspended because of permitting issues and became a widely protested project amid allegations of corruption and environmental concerns.
That reflected the simple fact that people don’t like mines in their backyard — an obstacle for mining projects worldwide, but especially in Europe, which is densely populated and has strong civil society.
“These projects had strategic status, EU money and fast-track permits, and it still wasn’t enough,” said EEB’s Marin. “If the supply push can’t deliver even under those conditions, the EU has to take demand reduction and sufficiency seriously. We can’t permit our way out of a market problem.”
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