EU 2035 petrol and diesel car ban: Germany reaches deal on synthetic fuels

A traffic jam near Frankfurt, Germany. - Copyright REUTERS/Kai Pfaffenbach

Published on 22/03/2023 - 16:11•Updated 27/03/2023 - 12:05

An alliance of countries is looking to water down new legislation over worries it could harm consumers and the European car industry.

In February, the European Parliament voted to approve a new law banning the sale of petrol and diesel cars from 2035.

The new rule - part of a larger effort to combat climate change in the EU - will speed up the bloc’s transition to electric vehicles.

Cars currently account for around 15 per cent of all CO2 emissions in the EU. The legislation demands that carmakers cut carbon emissions from new vehicles by 100 per cent. In practice, this means no new conventional fossil fuel-powered vehicles will be able to be sold from 2035 onwards.

The vote will now go to the European Council before the petrol and diesel car ban is made official.

But some countries are pushing back against the change, forming an alliance to oppose the changes and delay the decision.

Now Germany has reached a deal with the European Commission over the continued sale of vehicles that run on carbon-neutral synthetic fuels.

Germany has made a deal on synthetic fuels

On Saturday (25 March), the European Commission (EC) and Germany announced a deal to allow the sale of combustion engine vehicles that run on e-fuels after the 2035 ban.

"We have found an agreement with Germany on the future use of e-fuels in cars," EC Green Deal Chief Frans Timmermans wrote on Twitter.

"We will work now on getting the CO2 standards for cars regulation adopted as soon as possible."

His Tweet confirms that an accord has been reached adding that the Commission will follow up with the "legal steps" needed to turn it into law. It isn't yet clear what the details of this addition to the law will be.

German Transport Minister Volker Wissing also Tweeted saying that vehicles with combustion engines could continue to be registered after 2035 - if they use fuels that are carbon neutral.

Some experts have said they doubt whether vehicles powered by e-fuels can compete against electric cars. And CEO of Audi Markus Duesmann told German news website Der Spiegel that synthetic fuel "will not play an important role in the medium-term future of passenger cars."

Which countries have formed an alliance against the ban?

A group of car-friendly countries led by Germany formed an alliance with countries including Italy, Poland, Bulgaria and the Czech Republic to water down the new legislation.

These member states were pushing for cars that run on e-fuels to be exempt from the ban.

But France has said it is ready to "fight" for the new legislation, according to Economy Minister Bruno Le Maire. It has taken two years to finalise the measures which now only need a formal stamp of approval from ministers to become law.

"We are ready to fight for it because [delaying it] is an environmental mistake and I also think it is an economic mistake," Le Maire told France Info.

A final vote by the European Council, due to take place on the 7 March, has now been postponed as it was believed it wouldn't receive the majority required to get the go-ahead.

A spokesperson for Sweden, which holds the current presidency of the Council of the EU, said it would take place in "due time".

Is the EU ready to swap to electric vehicles?

Italy is home to big car brands like Fiat, Alfa Romeo and Ferrari, which rely heavily on combustion engine vehicles. Around 270,000 people are directly or indirectly employed by the automotive industry in the country.

Italian Minister for Transport Matteo Salvini called the new law economic “suicide” for the EU. He said it was “ideological fundamentalism” that would benefit China and harm the European car industry.

The country’s Foreign Minister Antonio Tajan also sought to dilute the legislation, calling for a 90 per cent reduction in carbon emissions rather than 100 per cent.

"Tomorrow in Brussels, at the meeting of ambassadors of EU countries, Italy will express a position against the proposed European regulation banning the production and sale of cars and vans with internal combustion engines by 2035," Energy Minister Gilberto Pichetto Fratin said in a statement at the time of the vote.

"Italy believes that the choice of electric should not be the only way to achieve zero emissions in the transition phase."

Others warn that neither Europe’s industry nor the general public is ready for such a dramatic shift.

The European People's Party Group - a centre-right political group in the European Parliament - say the law could lead to people driving older combustion engine cars after new sales are banned because they can’t afford an electric replacement.

Claims that electric cars are cheaper have been rendered “null and void” by the soaring cost of energy, argues German MEP Jens Gieseke of the European People's Party. Opponents of the legislation also say that car batteries are being produced abroad rather than in the EU.

Germany pushes for wiggle room on combustion engine ban

Germany is home to some of the world's biggest carmakers including the Volkswagen Group and BMW. It has also been one of the strongest voices in the call for the EC to allow combustion engines that use climate-neutral fuels or e-fuels beyond 2035.

The country's state secretary for transport Michael Theurer said earlier this year that the Commission should come forward "with a proposal [on] how e-fuels can be used, or how combustion engines which are run with climate-neutral fuels can be organised".

He added that electric vehicles were the "way to go" but believes that other zero-emissions technologies should also be supported.

E-fuels are made using materials that capture CO2 emissions which in theory balances out the carbon they produce when they burn. They are being developed so that modified versions of combustion engines can still be used.

'A victory for our planet and our populations'

President of the transport committee Karima Delli said that the decision by MEPs in February was “a historic vote for the ecological transition.”

“We will no longer, or almost no longer, have petrol or diesel cars on our roads in 2050.”

Delli added that the legislation would be a “victory for our planet and our populations.”

But EU Vice President Frans Timmermans warned MEPs that China was bringing 80 new models of electric cars to the international market between last year and the end of this year. The car industry needs to be prepared.

“These are good cars,” Timmermans said. “These are cars that will be more and more affordable, and we need to compete with that. We don't want to give up this essential industry to outsiders.”

Many European car companies are already preparing for the new law by becoming competitive in the electric vehicle market.

The automotive industry didn’t lobby hard against it - indicating that the electric shift is well underway.

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