This Week in Manufacturing — Brussels (#21, 2026)
Commission clears Carlyle-BASF Coatings deal with conditions; Major updates to automotive type-approval and vehicle data rules; EU acts on synthetic polymer microparticles and customs procedures; ETS enforcement actions.
May 31, 2026 to June 06, 2026
Commission clears Carlyle-BASF Coatings deal with conditions; Major updates to automotive type-approval and vehicle data rules; EU acts on synthetic polymer microparticles and customs procedures; ETS enforcement actions.
📋 In This Week's Newsletter
• 🇪🇺 European Commission
• ⚖️ EU Legislation
• 🤝 EU Council
• ✒️ EP Committee Work
• 📚 What We're Reading This Week
European Commission
Commission approves Carlyle's acquisition of BASF Coatings subject to divestment conditions
The European Commission has conditionally approved Carlyle Group Inc.'s acquisition of BASF Coatings under the EU Merger Regulation, following the notification on 8 April 2026 (Case M.12237). The Commission determined that the merger, as initially proposed, would restrict competition in the production and supply of polysulfides for aerospace sealants, with Nouryon (a Carlyle portfolio company) being one of only two global suppliers. To address these concerns, Carlyle committed to divest Nouryon's worldwide polysulfides business, including its manufacturing plant in Greiz, Germany, to an independent purchaser with industrial experience. The proposed remedies fully remove the vertical link between Carlyle's and BASF Coatings' activities in the affected markets. Implementation is to be monitored by an independent trustee under Commission supervision.
Commission accelerates phase-out of animal testing in chemical safety
On 31 May 2026, the European Commission unveiled a comprehensive roadmap to phase out animal testing for chemical safety assessments across 15 domains, including industrial chemicals and pharmaceuticals. The roadmap supports the objectives of REACH legislation and follows the Chemicals Action Plan. Three pillars structure this approach: accelerating adoption of non-animal methods, supporting research and innovation—including use of AI and big data—and stakeholder cooperation at EU and international levels. By 2029, a high-level conference will review progress toward alternative testing uptake. The action was triggered in part by the 2023 European citizens' initiative 'Save Cruelty-Free Cosmetics'.
EU Legislation (Official Journal)
New requirements for secure and standardised access to vehicle on-board diagnostics
Commission Delegated Regulation (EU) 2026/699 amends Regulation (EU) 2018/858 to reinforce procedures and technical requirements for secure, non-discriminatory access to vehicle on-board diagnostics (OBD) information for independent operators. In force from June 2026, the regulation enables vehicle manufacturers to implement cybersecurity measures while preserving repair market access, introduces pseudonymisation for data, and updates information catalogues for battery and advanced driver assistance systems. The changes address legal gaps as cybersecurity threats to vehicle systems rise.
Major update to emission, safety, and automation rules for EU vehicle type-approval
Commission Delegated Regulation (EU) 2026/1188 amends Annex II of Regulation (EU) 2018/858, introducing new requirements for environmental performance, emission standards (Euro 7), automated valet parking, and advanced driver distraction warning for small series and special vehicles. The amended table incorporates recent UN and EU regulations, including references to UN Regulation No 171 and Euro 7 legislative acts. The text also provides for a longer transition for manufacturers of small series and wheelchair-accessible vehicles to comply with updated electric safety rules.
REACH Annex XVII amendment clarifies polymer microparticles restrictions
Commission Regulation (EU) 2026/1168 amends Annex XVII to Regulation (EC) No 1907/2006 to clarify the scope of restrictions on synthetic polymer microparticles, notably granting explicit derogations for medicinal products used in clinical trials and process-oriented R&D, and setting a one-year minimum end-use for the derogation on permanent enclosure in a solid matrix. These changes apply retroactively from 17 October 2023 for clinical trial and R&D uses. The amendment also addresses feedback from stakeholders and the implementation challenges since the adoption of Regulation (EU) 2023/2055.
Commission revises Delegated Regulation on fire resistance classes for construction products
Commission Delegated Regulation (EU) 2026/557 (adopted 16 March 2026) supplements Regulation (EU) 2024/3110 by introducing updated classes of resistance to fire for harmonised construction products. The classes align with those under Delegated Regulation (EU) 2024/1681, ensuring continuity as regulatory frameworks shift from Regulation (EU) No 305/2011 to Regulation (EU) 2024/3110.
Major procedural revision: Customs rules for preferential origin of goods and proof of origin digitalisation
Commission Implementing Regulation (EU) 2026/1183 amends Regulation (EU) 2015/2447 (Union Customs Code Implementing Regulation), restructuring rules for supplier declarations, extending the Registered Exporter (REX) system, and introducing the EU electronic Proof of origin Certificates system (EU e-PoC). These changes harmonise procedures for preferential origin in light of Free Trade Agreements, enable digital certificate exchange, streamline origin verification, and unify VAT declarations for cross-border trade. Rollout of e-PoC is scheduled from 2030, supporting Single Window for Customs and future-proofing EU origin procedures.
Decision on derogation from on-board ETCS installation for 234 French locomotives
Commission Implementing Decision (EU) 2026/1193 approves France's request, under Directive (EU) 2016/797, not to apply the obligation for installation of ETCS (European Train Control System) onboard 234 Alstom Traxx locomotives until 31 December 2029. The derogation is set with alternative safety requirements including use of the Italian SCMT system and GSM-R for the cross-border section, provided specific eligibility and notification conditions are met.
EU Council
Transport Council to adopt conclusions on maritime industrial and EU ports strategy
On 8 June 2026, the Transport, Telecommunications and Energy Council (Transport) will exchange views on decarbonisation efforts in the transport sector post-2030, and is expected to adopt conclusions regarding the maritime industrial strategy and a new EU ports strategy.
ECOFIN to address carbon border adjustment and savings union policies
On 12 June 2026, the Economic and Financial Affairs Council (ECOFIN) aims to agree on a position to strengthen the carbon border adjustment mechanism and will debate the market integration and supervision package as part of steps toward the EU’s savings and investment union.
EP Committee Work
ENVI Committee examines CO2 standards and deforestation-linked products
On 1-2 June 2026, the Committee on the Environment, Climate and Food Safety (ENVI) considered draft reports on amending Regulation (EU) 2019/631 regarding CO2 targets and vehicle labelling for light duty vehicles (rapporteur: Massimiliano Salini, PPE), and held an exchange on the Commission’s review of Regulation (EU) 2023/1115 (EUDR) on deforestation-linked commodities. Amendments could be tabled by 9-10 June. Additional exchanges addressed preparations for COP 17 of the Convention on Biological Diversity and wildfire management with Commissioners Roswall and Lahbib.
FISC Subcommittee hearing: Evaluating the reverse charge mechanism for VAT fraud
On 2 June 2026, the FISC Subcommittee on Tax Matters organised a public hearing with academic and expert testimony on the impact of the reverse charge mechanism (Articles 199a/199b, Directive 2006/112/EC). Experts examined its effectiveness in combating Missing Trader Intra-Community (MTIC) VAT fraud and discussed the interface with the VAT in the Digital Age (ViDA) package and Digital Reporting Requirements. The hearing also addressed risks of fraud migration, sectoral targeting, and long-term prospects for the mechanism within evolving EU anti-fraud policy.
IMCO and HOUS Committees hold joint hearing on sustainable construction materials
On 4 June 2026, the Committee on the Internal Market and Consumer Protection (IMCO) and the Special Committee on the Housing Crisis (HOUS) convened a public hearing on safe and sustainable construction materials for EU housing stock. Panels included industry, standardisation, and EU representatives—among them, Christoph Dorn (SAKRET/Knauf), Pascal Eveillard (Construction Products Europe AISBL), Cinzia Missiroli (CEN/CENELEC), and Natalia Zebrowska (DG GROW). The hearing addressed the new Construction Products Regulation (EU) 2024/3110, Digital Product Passports, and market issues around material supply and industrial innovation in context of housing affordability and sustainability.
ITRE, SEDE, and REGI Committees address defence readiness and regional policy reform
At their meetings from 2-4 June 2026, the Industry, Research and Energy (ITRE), Security and Defence (SEDE), and Regional Development (REGI) committees undertook joint scrutiny of legislative files on defence readiness—such as the acceleration of permit-granting for defence projects (rapporteurs: Lucia Yar, Renew; Henrik Dahl, PPE)—and horizontal reforms to EU funding for regional development and the European Social Fund. REGI additionally assessed the European Fund for Regional Development 2028-2034 and multi-level governance roles at a dedicated public hearing.
ENVI Committee public hearing reviews EU ETS performance and reform scenarios
On 2 June 2026, the ENVI Committee hosted a public hearing titled 'EU ETS: Current Performance and Pathways for the Future', featuring interventions from industrial, NGO, and research representatives. Industry organisations (Heidelberg Materials, Association of Chemical Industry of Czech Republic) discussed price volatility, free allocation, and the challenges of decarbonisation investment, while researchers examined market stability, supply-demand balance, and proposals for tighter carbon budgets and expanded scope in the context of the 2040 climate target.
What We're Reading This Week
- What Trump’s next tariffs might look like: Trump signals potential steep tariff hikes on Chinese goods, raising concerns about global trade tensions and consumer prices.
- How can Europe secure critical industries? Ask the Euronews AI chatbot: Euronews launches an AI chatbot to answer public questions about safeguarding Europe's vital industries amid rising security concerns.
- 4 ways Europe wants to wean off US tech: European leaders advance new policies and investments to strengthen domestic tech and reduce reliance on American technology companies.
- EU’s tech independence push disappoints Brussels and irks the Americans: European Union efforts to bolster tech sovereignty fall short of ambitions, sparking frustration in Brussels and concern in Washington.
