UAE-Germany ties move from trade to building together

At BMW’s plant in Landshut, Bavaria, a foundry casts engine parts, components for electric cars and body structures. In 2021, BMW agreed to buy 43,000 tonnes of solar-produced aluminium a year from Emirates Global Aluminium, nearly half the foundry’s requirements at the time. The electricity came from the Mohammed bin Rashid Al Maktoum Solar Park in the desert outside Dubai.

EGA had supplied BMW since 2013. What changed was how the metal was made: EGA became the first company to produce aluminium commercially using solar power, with BMW its first customer for that metal. By 2023, the product combined solar aluminium with recycled metal sourced in the UAE. When the agreement was extended in November 2024, the aim was to raise the recycled share further while meeting BMW’s exacting specifications.

That is the UAE–Germany relationship in miniature. Trade figures describe it. An Emirati smelter developing a specialised product for a German factory explains it.

His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, begins a state visit to Germany on September 9. The visit builds on more than five decades of diplomatic relations and a strategic partnership established in 2004, with further steps to strengthen cooperation in 2019 and 2022.

The headline numbers are healthy. Non-oil trade rose more than 14 per cent, from $13.59 billion in 2024 to $15.51 billion in 2025. But the deeper story is what each country can do through the other: supplying specialised products, investing in industry and building new capabilities together.

A demanding customer can drive that process. “The BMW Group demands the highest quality metal produced with solar power, and this continues to drive our innovation at EGA,” said chief executive Abdulnasser Bin Kalban when the agreement was renewed.

Meeting that demand is a different kind of diversification from adding tonnes. It builds a competitive position based on technical quality as well as price, turning the UAE’s clean energy into an industrial advantage.

Investment adds another dimension. Between 2020 and 2024, German investment flows into the UAE totalled $8.96 billion, against $744 million flowing the other way. Those figures predate a major expansion of Emirati participation in German industry.

On December 10, 2025, XRG, ADNOC’s international investment company, completed its acquisition of Covestro, the Leverkusen materials producer, at an enterprise value of about €14.7 billion. The deal also brought €1.17 billion in fresh capital to support a business serving carmakers, builders and electronics manufacturers.

For Germany, that is long-term capital to support industrial modernisation. For the UAE, it is a stake in advanced materials, where value depends on chemistry and engineering as well as scale. But a share certificate does not carry knowledge across borders by itself. Ownership can generate returns. Learning requires engineers working across sites, research links and suppliers in both countries developing their expertise.

There is already a practical route from investment to closer cooperation. In February, Covestro, Fertiglobe and Abu Dhabi chemicals venture TA’ZIZ agreed to explore ammonia supply, the infrastructure to deliver it and wider industrial opportunities. Ammonia is a key raw material for Covestro. The agreement remains exploratory, but it starts with a real business need rather than a general promise of partnership.

Building together extends well beyond large companies. Around 2,000 German businesses operate from the UAE, which offers access to markets across Asia and Africa. The Emirati opportunity is to deepen what they do locally: engineering teams, training tied to production and supplier relationships with local firms.

A partnership involving more specialised small and mid-sized companies can spread those benefits further. It gives German firms room to grow while creating opportunities for skilled jobs and Emirati suppliers, making the relationship less dependent on a few large transactions.

Energy supports the same industrial logic. In February, ADNOC and RWE agreed to explore liquefied natural gas supply to Germany and other European markets. Masdar and RWE also agreed to explore investment in German battery-storage projects. Such capacity helps keep power reliable when renewable output varies. For a manufacturer weighing a long-term investment, that reliability matters alongside financing and customers.

Germany’s search for broader partnerships gives these commercial ties strategic weight. Ahead of Chancellor Friedrich Merz’s Gulf tour in February, he stressed the importance of broader partnerships, saying: “We need such partnerships more than ever at a time when politics is increasingly being determined by major powers.”

The value for both countries is in adding options: more suppliers, more customers, more sources of capital and greater ability to respond when trade is disrupted. Germany can widen its access to investment and markets. The UAE can deepen its industrial expertise and connections with European production networks. Neither gains resilience by replacing one concentrated dependency with another.

The way forward is building on existing business relationships. Joint research in advanced materials could help companies develop new products. Industrial artificial intelligence could be tested on production lines in either country, judged by whether it cuts downtime, improves quality or saves energy. Training should follow the skills those projects need. Each idea needs customers and a viable business model before it becomes a source of growth.

The presidential visit offers an opportunity to strengthen these connections. Germany is seeking to modernise its industrial base while the UAE develops more specialised capabilities and new sources of growth. Their interests meet in the factories, laboratories and businesses that can deliver both.

The aluminium reaching a foundry in Bavaria shows what a demanding customer can make possible. Covestro shows what long-term investment can support. The next gains lie in what the two countries learn to build together.

Mohammad Al Darmaki is an economic researcher at ECSSR