Q&A: Europe’s chance to shape the future of global trade

The question isn’t whether globalization will continue, but who will lead it and on what terms, says BMW’s Frank Niederländer.

With geopolitical tensions and uncertainty in the world market on the rise, the EU has an opportunity to shape the global trade agenda — if it gets out of its own way.

“Europe had the ambition to lead with the Green Deal, setting the pace for the global economy,” says Niederländer, BMW Group Vice President, Government Affairs Europe. “But while we focused on regulation, others moved ahead prioritizing speed, investment and outcomes.”

Europe’s auto industry has a sterling reputation globally for manufacturing high-quality vehicles, and the EU has a goal of zero emissions for all cars by 2035. But China’s drive for innovation has helped it lead the world market for electric cars. Only one of the world’s top 15 battery electric vehicles is made in the EU.

“The share of EVs sold still depends heavily on national regulatory conditions. This fragmentation in the single market remains one of the greatest challenges to the uptake of electric vehicles. Political alignment, investment scale and the ability to react with speed is essential,” says Niederländer.

POLITICO Studio sat down with Niederländer to discuss what shifts need to happen to create a climate-neutral, competitive Europe.

POLITICO Studio: What is BMW’s outlook on international trade in this era of geopolitical tension?

Frank Niederländer: The global trading system is shifting — and it has real consequences. It shapes investment flows, supply chains and the rules of competition in real time.

Other regions are acting with intent ― investing heavily to secure their industrial bases through billions in subsidies, raw material lockdowns and strategic alliances that give them an edge. Access to energy, technology and key inputs is now, very openly, used as leverage. The risk for Europe isn’t deglobalization, it’s marginalization. It’s falling behind while others move with more speed and focus.

Europe must remain open with a trade policy that reinforces our competitiveness, secures our supply chains and reflects our values, while recognizing and managing strategic dependencies.

PS: Amid the United States’ increasingly isolationist trade policies, is there a new opportunity for Europe?

FN: There could be, if the EU stops playing defense and starts thinking strategically about where it wants to lead. Europe has a chance to position itself as a stable, credible anchor for open and fair trade. For that, we need cohesion within the EU, and alignment of environmental, economic and trade policy. More free trade agreements with core partners (such as Mercosur) are essential today after a long period of insufficient EU engagement.

Europe has what it takes to lead: a strong Single Market, technological leadership and a solid rule-of-law tradition. What’s missing is the will to shape the global trading system, not just manage its consequences.

We should focus on areas where the need for collaboration is highest, such as climate-neutral industry, resilient supply chains and high-value innovation. The EU must be capable of swiftly recalibrating its priorities to keep pace with the evolving geopolitical environment, or it may find itself sidelined. We need to envisage growth as an imperative again.

PS: What emerging technologies could define Europe’s competitive edge? How is BMW helping to accelerate them?

FN: Europe’s edge will be defined by the convergence of climate ambition and industrial competitiveness. The winning technologies will be those that deliver both. At BMW, this is already shaping how we build, invest and compete globally.

We have long embedded circularity into the core of our strategy ― in the design phase, material sourcing and end-of-life recycling. We are also investing heavily in battery cell innovation and scaling European production capacity while continuing to advance a broad range of powertrain technologies ― from electric drivetrains to highly efficient combustion engines running on renewable fuels. In fact, all diesel BMW vehicles produced in Germany are now delivered with HVO100, a renewable fuel that reduces life cycle CO2 emissions by up to 90 percent.

Europe has the talent and industrial base to lead. The challenge now is to translate that potential into scale — with policy that recognizes and accelerates technological leadership. We need agile policy frameworks, public-private partnerships and an ecosystem that fosters innovation, rather than policies that dictate technologies.

Europe has the talent and industrial base to lead. The challenge now is to translate that potential into scale — with policy that recognizes and accelerates technological leadership.

PS: How can Europe turn decarbonization into a long-term competitive advantage? What role does BMW play in that transformation?

FN: Decarbonization can give Europe an economic edge if we scale up cost-effective, low-carbon technologies. While Europe led with ever tighter regulation, other regions ― notably the U.S. and China ― have advanced by mobilizing massive investments, securing critical resources and rapidly scaling technologies. Still, Europe has what it takes to lead this transition through choice and innovation, not restrictions. 

Take the supply chain. The largest levers for reducing CO2 emissions lie upstream from manufacturers. We prioritize renewable electricity, secondary materials and low-carbon production processes, and we actively invest in and source from suppliers that meet those standards. That creates real momentum on the demand side to accelerate the transition.

This approach plays to Europe’s industrial strengths: advanced engineering capabilities, integrated supply chains and the ability to deliver premium solutions across multiple technologies. Let companies compete to deliver the best climate solutions — that’s how we’ll maintain global leadership.

PS: How does life cycle assessment (LCA) affect BMW’s strategies?

FN: At BMW, our strategic focus is clear ― achieving business success while reducing our climate footprint. To do that, we must look at the full life cycle of our products ― from raw material extraction to manufacturing, use and end-of-life recycling. This is essential if we want climate policy to reflect real impact.

Tailpipe emissions cannot be the only measure of a vehicle’s environmental impact. We need to assess CO2 emissions across the entire value chain. This means designing with carbon footprint in mind from the start, and we’re already applying this approach with the Neue Klasse, a new, fully electric BMW model generation, where we are embedding circularity and carbon reduction every stage of development.

The EU’s move toward LCA is welcome — but it needs consistency, transparency and practical application across sectors. Done right, LCA will reward innovation where it matters most: in cutting total emissions.

PS: How is BMW future-proofing its global supply chain?

FN: Europe’s future competitiveness will hinge on whether we treat supply chains as a strategic asset, not a logistical challenge. That’s especially true in areas such as the battery value chain, where industrial success depends on both resilience and global cooperation. This will require massive investments — just look at the figures in the Draghi report.

This isn’t about reducing complexity. It’s about managing it. Engagement with partners such as China must be realistic and rules-based, because decoupling is neither feasible nor desirable. Europe cannot operate as an island.

At BMW, our global production footprint is built upon a strong European foundation. We localize to serve markets more efficiently and to strengthen resilience, and our international presence amplifies Europe’s role as a hub for innovation, engineering excellence and high-value manufacturing.

Climate neutrality must be engineered — deliberately, collaboratively, and at scale.

PS: What can the EU do to ensure that companies like BMW remain globally competitive while leading the green transition?

FN: Europe has the chance to define climate neutrality in a way that keeps Europe competitive and keeps jobs here.

Stronger cooperation between governments and industry is key. The Strategic Dialogue launched by EU Commission President Ursula von der Leyen was an important step to this and must continue.

The future will be shaped by many choices — smart regulation, strong industrial alliances and a shared commitment to progress that is measurable, not ideological.

PS: What future does BMW imagine for a climate-neutral world?

FN: A climate-neutral Europe is not just a moral responsibility — it’s a competitive imperative. It means rethinking how we power industries, design products and create value chains. The future will be built not on a single breakthrough but by thousands of decisions across technology, regulation and investment. Climate neutrality must be engineered — deliberately, collaboratively and at scale.  

At BMW Group, we are engineering that future with purpose. Our 2030 climate targets are fully aligned with the Paris Agreement, which means reducing our CO2 emissions by 40 million tons by 2030 as compared to 2019.

Europe has the potential to lead this transformation. But leadership requires the courage to move beyond outdated regulations, respond decisively to shifting geopolitical realities and streamline the path forward. This is the moment to lead with conviction.