Forced labour, circularity and supply chain transparency all priorities to enable a more sustainable automotive industry in Europe
The scope of discussions surrounding sustainability in Europe's automotive sector has evolved beyond decarbonisation alone, with forced labour and circular economy principles now seen as critical to ensuring the long-term sustainability of the industry. At CLEPA's Materials, Regulations and Sustainability Event, industry leaders offered insight into how businesses and EU policymakers can achieve their sustainability goals.
Benjamin Krieger, CLEPA's secretary general, opened the organisation's Materials Regulations and Sustainability Event 2026CLEPA
In his opening address, Benjamin Krieger, secretary general of the European Association of Automotive Suppliers (CLEPA) underscored the need for the business case for sustainability to be prioritised, ensuring that Europe's automotive sector can remain competitive as it looks moves towards more ethical and environmentally-friendly supply chains.
"Sustainability must work for industry," Krieger stated. "By fixing how we finance the transition,
securing strategic inputs and prioritising re-use over low-value recycling, Europe can turn
decarbonisation into a driver of competitiveness and autonomy.”
Sustainability as a key lever for Europe's competitiveness
A recurring theme across the event was that sustainability is no longer viewed as a standalone compliance exercise, but increasingly as a strategic lever for competitiveness, resilience and industrial sovereignty in Europe’s automotive supply chains.
Industry leaders argued that sustainability has become deeply intertwined with supply chain security, geopolitical risk management and long-term industrial strategy. “Sustainability today is closely linked to supply chains, resilience, human rights, raw materials, geopolitics and digital transformation. It is not any longer a standalone topic," stated Ferdinand Wieland, senior vice president for procurement and supply management of the automotive technology business segment at Thyssenkrupp and RSCI board member. "It has become part of how the industry operates as a whole.”
Several speakers stressed that the current wave of due diligence and sustainability legislation can strengthen Europe’s supply chains – but only if implemented in a way that supports industrial scalability and avoids overwhelming suppliers. “The real challenge is how to implement it in a way that it's practical, scalable and globally working, while at the same time making the right investment decisions,” Wieland acknowledged.
Others pointed to the introduction of the German Supply Chain Act as an example of how legislation sometimes seen as burdensome in the beginning can deliver strategic value through encouraging supply chain transparency. What began as compliance work under this due diligence legislation is increasingly being repurposed as a broader resilience tool.
"Without a sustainability or due diligence obligation through the German Supply Chain Act, we would not be where we are now," admitted Nikolaus Rumpf, global director of ESG compliance and supply chain ESG at Magna International. "Bear in mind that five years ago, we did not really care a lot about supply chain transparency and mapping. Then there was this law and we had to think about it."
Rumpf noted that once firms started to look into supply chain mapping, many began to realise that they had more in-house data then they thought, and the more difficult task became working with suppliers to extend this process along the whole supply chain. He shared that when it came to communicating with suppliers, clearly communicate why it can be advantageous to them as well is the key to ensuring all parties are on the same page.
"Of course it was a burden for us as a supplier and it's really difficult to talk to our suppliers – not only the small suppliers but also the bigger suppliers," he said. "They don't understand but if you talk to them, they realise there's a benefit in it."
Driving out forced labour in Europe
Over the course of the conference, several speakers emphasised that focusing on decarbonisation alone is not enough to achieve true sustainability in today's supply chains. Broader ESG and supply chain due diligence topics fall under this umbrella, and one that is crucial in 2026 is the elimination of forced labour practises in supply chains.
In a presentation comparing the EU's approach to forced labour regulation with the US' approach, Ethan Wooley, global director of strategy at Kharon, discussed the rollout of the EU Forced Labour Regulation (EUFLR). Having entered into force in December 2024, the European Commission is set to issue implementation guidance by June 14, 2026. Then 18 months on from this date – on December 14, 2027 – the EUFLR will be fully applicable.
"For years, the EU and the US have been pushing compliance obligations beyond what appears on government maintained sanctions lists," explained Wooley.
He referenced the introduction of the 50% rule in the US in 2014 – whereby any entity that is 50% or more owned by a US-sanctioned party is itself considered blocked by US law, even if that subsidiary doesn't appear on the sanctions list itself – and how the EU followed suit in 2024, when it published its Best Practises Guidance.
Comparing the EUFLR with the Uyghur Forced Labor Prevention Act (ULFPA) – a US law passed in 2021 targeting forced labour in the Xinjiang province of China – Wooley highlighted a number of significant differences.
Ethan Wooley, global director of strategy at Kharon, delivered a presentation on forced labour due diligence at the CLEPA eventCLEPA
First of all, the ULFPA is specifically focused on Xinjiang, whereas the EUFLR's geographic scope is global. Secondly, while the UFLPA is only concerned with imports to the US, the EUFLR covers both imports and good being produced in the EU. Finally, and perhaps the most important distinction between the two pieces of legislation, the process of enforcing these laws differs greatly.
The ULFPA is unique in that it established the rebuttal presumption, whereby any goods that are mined, produced or manufactured – in whole or in part – from the Xinjiang Uyghur Autonomous Region of China, or any company that is on the UFLPA entity list, is presumed to have been produced with forced labour.
This heavily empowers US customs authorities to seize shipments and hold them until the required documentation is provided. Therefore, without "clear and convincing evidence", shipments cannot be released.
The EUFLR, however, uses a risk‑based investigatory process. Risks are identified during a preliminary enquiry (either through a proactive investigation or allegations submitted) and companies are given 30 days to respond to a request for information about the due diligence steps taken throughout the supply chain.
Once those 30 days are up or information is submitted, the authorities use the evidence to assess whether there's a substantiated concern, leading to a full investigation in which goods can be seized, withdrawn from the EU market or destroyed.
While in the US, the ULFPA's rebuttal presumption assumes guilt and the burden of proof is immediately on the importer to clearly show otherwise, the EUFLR is enforced through investigations based on "substantiated concern".
The definition of forced labour
The European Comission uses the International Labour Organization (ILO) definition of forced labour, which defines it as "all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily". This, the commission has clarified, refers to situations in which individuas are coerced to work through violence, intimidation, manipulated debt, retention of identity papers or threats of denunciation to immigration authorities.
A new approach to circularity
Beyond compliance, speakers repeatedly linked sustainability to Europe’s wider industrial competitiveness challenge, particularly in relation to dependence on Chinese clean technologies and raw materials. Circularity emerged as a central pillar of that strategy.
"Circularity can be a very good strategy in order to respond to the three dependencies that we have currently: the geological one; the energy one; and the clean tech and AI one," outlined Arthur Corbin, business adviser in the cabinet of executive vice president Stephane Séjourné at the European Commission.
Industry representatives also pushed for sustainability frameworks that better recognise the contribution of suppliers to decarbonisation. Jean-Luc di Paola-Galloni, CLEPA board member and Valeo's global external affairs and chief sustainability officer, argued that current carbon accounting frameworks disproportionately favour OEMs while underestimating the role of suppliers developing low-carbon technologies. “When industrialists like us are truly working to decarbonise mobility, we need to have more recognition from the regulation that we are the ones our customers couldn't do without," he commented.
Circularity and remanufacturing were presented not only as environmental measures, but as industrial and economic opportunities capable of reducing dependency on imported materials. Anna Rossi, sustainability and partnerships director at Forvia, described how Europe’s circular economy players are trying to build profitable closed-loop automotive systems spanning dismantling, reuse, repair, remanufacturing and recycling. "To grow and to make circular economy grow in business we need to be profitable, otherwise there is no growth possibility," she said.
Rossi also warned that Europe risks missing this opportunity if regulatory frameworks fail to support domestic recycling industries. “If we don't solve such kind of issue, the material recycling industry will never get to life in Europe,” she added.
Another key theme of the conference was that while a lot of recent legislation is focused on recycling, the priority for a truly circular economy should be extending the life of existing components and vehicles, through repairing and remanufacturing. "Recycling is only the last resort when you cannot repair and when you cannot remanufacture," said Valeo's di Paola-Galloni.
This sentiment was echoed from an aftermarket perspective by Léa Dégardin, European public affairs director at Mobivia. “The first step towards circularity for us is really repairability,” she said. “Repairability is really essential to extend the vehicle lifespan and to reduce waste as well.”
Dégardin also flagged another issue holding back circularity – OEMs' lack of openness to the independent aftermarket when it comes to data sharing. "Today we don't always have fair and non-discriminatory access to data and vehicle information," she explained. "We need to be able to have access to this data to do very basic service."
This, she said, would be crucial in order to give the consumer the option to choose freely between an OEM's workshop and an independent one.
