Zvei information 05/2025

Green Claims Directive not necessary, but problematic

The informative value of environmental claims should be improved and made more transparent. In 2024, the EU directive on consumer empowerment was adopted to prevent greenwashing, among other things. This supplements the existing EU Directive on Unfair Commercial Practices (UCP) to include environmental claims. In future, general environmental claims will be prohibited if they are not substantiated. The EU is now seeking to supplement these requirements with the Green Claims Directive (GCD). The necessary requirements for environmental claims have been sufficiently defined by the recently adopted EU Consumer Empowerment Directive (EmpCo). The Green Claims Directive will not only lead to superfluous double regulation, but will also bring legal uncertainty due to contradictions between the legal acts, which must now be avoided.

The Unfair Commercial Practices Directive and the Green Claims Directive proposal are fundamentally based on a common definition of environmental claims: they cover all claims that are not mandatory and are intended to convey a positive (or no) environmental impact in the context of commercial communication. However, while the UGP now contains requirements for "general environmental claims" as a result of the EmpCo extension, the GCD refers to "explicit environmental claims". This differentiation, which initially seems understandable, does not work in practice, as the regulatory areas overlap and it is not possible to determine in which specific cases which requirements apply. The ZVEI has drawn up a paper on this, which identifies the aspects of the UCP Directive and the Green Claims proposal that are problematic in terms of double regulation and contradictions. This incoherence paper complements the ZVEI page on the Green Claims Directive.

Exports in the German electrical and digital industry have recently stagnated

Following a moderate decline in January, exports in the German electrical and digital industry more or less stagnated in February 2025. At €19.5 billion, their value was only 0.3% higher than a year earlier.

In the first two months of this year, aggregated industry deliveries abroad thus totalled EUR 40.9 billion - a slight decrease of 0.8% compared to the same period in 2024. "Compared to the much sharper decline in exports last year, the export business has thus stabilized recently, although this could only be a snapshot in time given the zigzag course of US tariffs in particular since the beginning of April at the latest," said ZVEI Chief Economist Dr Andreas Gontermann.

Imports of electrical and electronic products to Germany increased by 2.3% year-on-year to 20.0 billion euros in February.

Cumulatively from January to February, electrical imports amounted to €43.5 billion - an increase of 3.9% compared to the previous year. "The industry-wide trade balance of exports and imports was therefore a good two and a half billion euros in the red in the first two months," said Gontermann.

Exports by the German electrical and digital industry to the eurozone amounted to €6.1 billion in February. They thus fell short of the previous year's figure here by 1.0%.

Exports to Spain (+ 12.2% to € 709 million), Portugal (+ 7.4% to € 195 million) and Slovenia (+ 3.2% to € 77 million) increased more significantly, while deliveries to Austria (+ 1.0% to € 810 million) and Slovakia (+ 0.7% to € 227 million) were only slightly up on the previous year.

There were moderate declines in exports to Belgium (- 1.0% to € 436 million), France (- 2.0% to € 1.1 billion) and Italy (- 2.1% to € 865 million) and higher declines in exports to the Netherlands (- 4.4% to € 1.1 billion) and Finland (- 4.6% to € 124 million). Deliveries to Ireland plummeted by 43.5% to € 94 billion.

In total, industry deliveries to the eurozone amounted to €13.7 billion in the first two months of this year, which corresponds to a drop of 2.4% compared to the previous year. Electrical exports to countries outside the eurozone totaled €13.4 billion in February 2025. This represents a moderate increase of 0.9% compared to the same month last year.

Exports to Taiwan (+ 41.4% to € 309 million) and Japan (+ 32.1% to € 377 million) recorded very high growth, while exports to the United Kingdom also saw double-digit growth (+ 12.6% to € 841 million). Deliveries to Romania (+ 5.5% to € 418 million), Poland (+ 5.2% to € 875 million), the Czech Republic (+ 5.0% to € 802 million) and Hungary (+ 4.8% to € 615 million) also increased significantly.

US tariff policy not yet noticeable, business with China declines significantly

Business with the USA increased by 1.8% to € 2.2 billion in February. "The US government's tariff measures are unlikely to have played a major role here for the time being," said Gontermann.

Exports to Turkey (- 5.1% to € 328 million), Switzerland (- 5.4% to € 648 million) and Sweden (- 7.4% to € 354 million) declined. Exports to China (- 17.3% to € 1.8 billion) and South Korea (- 20.5% to € 253 million) fell particularly sharply. "Deliveries to the People's Republic thus declined at a double-digit rate for the fourth month in a row," said Gontermann.

In the overall period from January to February 2025, exports to third countries stagnated compared to the same period in the previous year (- 0.1% to € 27.2 billion).

Electrical household appliance market stabilizes at a low level in 2024

According to ZVEI calculations, large and small household appliances generated domestic sales of around € 10.1 billion in Germany in 2024 - in the context of a persistently challenging market situation. This corresponds to a slight increase of 0.5% compared to the previous year. The market for household appliances in 2024 was primarily impacted by the continued subdued consumer climate in Germany.

The sales share of large household appliances amounted to around 6.2 billion euros in 2024 (- 1.2% compared to the previous year). In total, around 16 million large household appliances were sold in Germany last year. The declining sales of large household appliances thus recovered (+3% compared to the previous year). Despite the continued stagnation in the construction sector, demand for built-in appliances also increased again (+ 2.6 % in sales). Overall, the market was supported by replacement purchases, the trend towards higher-quality appliances and energy efficiency. Tumble dryers (+22%), dishwashers (+8%) and washing machines (+5%) were particularly in demand in 2024.

Domestic sales of small household appliances rose by 4% to EUR 3.9 billion in 2024 thanks to a broad product portfolio and ongoing trends, particularly in the area of kitchen appliances. After a solid previous year (+ 1.5% in 2023), small household appliances more than doubled their growth rate. The appliance segments in particularly high demand once again included air fryers, coffee preparation, floor care including robot vacuum cleaners, food prep and healthcare products.

Overall, consumer sentiment in Germany remained sluggish despite the upward trend following the low point in November 2022 and once again weighed on the market for consumer goods, including household appliances, in 2024. In light of ongoing consumer uncertainty, particularly due to global political developments, consumers' propensity to save continued last year: Their willingness to buy did not increase significantly.

Sluggish consumer sentiment in Germany so far

Exports of household electrical appliances fell in the period from January to December 2024. According to the Federal Statistical Office, global foreign sales of large household appliances fell by 4.5% and sales of small household appliances by 17%.

The household appliance industry is cautiously optimistic about 2025, although the first quarter of this year fell short of expectations. However, a stabilization of inflation, increased wages due to collective wage agreements and the ECB's recent interest rate cut are likely to send positive signals for the willingness to buy in the further course of the year. If the new German government succeeds in stimulating the construction and renovation sectors, the built-in appliance business could benefit. In addition, the replacement business will remain a stable pillar and the long-term trends of energy efficiency, convenience and connectivity will continue to shape the market in 2025.

The market for household electrical appliances should therefore stabilize overall over the course of the year and slight growth is possible over the course of the year as a whole, particularly for small household appliances. However, there is fundamental uncertainty against the backdrop of current global customs tariff developments.

As a globally active and networked sector, the household appliances industry is inevitably affected by the new US customs policy and its consequences. Production facilities are located around the world, and supply chains and sales markets are global. The exact consequences of the current confusing and highly dynamic situation cannot yet be estimated - however, a trade war and any associated renewed rise in inflation would present companies with additional challenges.

Export restrictions for rare earths jeopardize security of supply

"China's current export controls on rare earths are jeopardizing the security of supply for the electrical and digital industries. Our companies depend on free, reliable and sustainable access to these strategic raw materials in order to successfully drive innovation, climate protection and economic resilience. The ZVEI is calling on the European Commission and the German government to reach an agreement with China quickly. This must guarantee uninterrupted access to rare earths and also ensure that no export restrictions are imposed on our companies for their products to non-sanctioned countries.

At the same time, the EU must finally take appropriate measures to end the one-sided dependence on individual countries for the supply of critical raw materials. Shortages had already occurred in 2011 after China restricted the export of rare earths. In the current changed geopolitical climate, Europe must position itself more resiliently."

Importance of rare earths for the electrical and digital industry

The electrical and digital industry processes rare earths in important key technologies. Neodymium is primarily used in high-performance permanent magnets. They are used to a large extent in wind turbines, electric motors, electric drives in production, miniaturized components in information and communication technology and consumer electronics, in magnetic resonance tomographs and spectrometers. The production of semiconductors also requires various rare earths, such as lanthanum. Semiconductors are used as key components for electric motors, electric drives and generators and are the basis for processors and memory for data centers. Yttrium is used as a stabilizer in ceramic materials and is required for laser technology. Europium and terbium are used as components in plasma screens, LCDs, energy-saving lamps, fluorescent lamps, radar devices and cathode ray tubes.

Dates

Contacts

Semiconductors Association
Lyoner Street 9
60528 Frankfurt am Main
Tel. 069/6302-276/-251
Fax 069/6302-407
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Trade Association PCBs Components and Systems
Lyoner Street 9
60528 Frankfurt am Main
Phone 069/6302-437
Fax 069/6302-438
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