The European Union is scrambling to salvage a plan to effectively ban new combustion-engine cars by 2035 after Germany and Italy threatened to block the agreement.
(Bloomberg) — The European Union is scrambling to salvage a plan to effectively ban new combustion-engine cars by 2035 after Germany and Italy threatened to block the agreement.
In one possible compromise, Germany is seeking assurances that there will be an exemption to the rules for e-fuels, according to people familiar with the matter. German Transport Minister Volker Wissing spoke with Frans Timmermans, the EU’s climate chief, to discuss the proposal as part of a flurry of talks ahead of a vote on Tuesday, said the people, who asked not to be identified because the deliberations are private.
“If the Commission has a credible stance in conversations with the ministers and the German government I’m optimistic that a solution will be found,” said Sven Giegold, state secretary at Germany’s Federal Ministry for Economic Affairs and Climate Action. “However I can say, and that’s obvious, that the ongoing conversations are difficult.”
The last-minute intervention by Germany’s transport ministry has thrown what would normally be a formality into disarray. Preparations for Tuesday’s vote were postponed until Friday due to Germany threatening to abstain and Italy saying they would reject the CO2 rules agreed last year. Without a qualified majority among member states, the regulation can’t become law.
There is widespread frustration in the European Commission that Germany is raising objections at this stage when it agreed on the council’s position last June. The home to Volkswagen AG and BMW AG took part in a final deal with the parliament in October and balking after a so-called trilogue agreement is highly unusual.
While Italy’s opposition is seen as stubborn, EU officials hope Germany can be persuaded to back down, if it gets assurances that the commission will propose an exemption for climate-neutral synthetic fuels before a scheduled review in 2026.
The technical nature of the alternative fuel means that the bloc’s executive branch won’t be able to put something on the table this week, but it could still show its support bilaterally.
E-Fuel Skepticism
Despite Germany’s support, e-fuels face skepticism over whether they can really help reduce emissions for ground transport because they’re currently scarce and significantly more expensive than gasoline and diesel. One of Wissing’s counterparts in the German cabinet appeared ready to back down.
“I believe Germany should act reliably at the European level,” Environment Minister Steffi Lemke told ARD radio. “There is a solution that needs to be found, for which we still have enough time. It should then come into force in 2035.”
The differing views is a sign of the complexity inherent in Chancellor Olaf Scholz’s three-party coalition. Wissing is a member of the pro-business Free Democrats, which has butted heads with the Greens — a fellow junior partner in the government — over transport policy among other issues.
The FDP, which has suffered a series of setbacks in regional elections, is keen to be seen as a champion of technological choice as well as supporting German jobs.
The automotive industry makes up roughly 5% of the nation’s economy and employs more than 800,000 people. The sector includes scores of specialized parts-makers that have developed over the course of more than a century of supplying carmakers including Mercedes-Benz with transmissions, exhaust systems and components for combustion-engine cars. Many of these parts aren’t needed for electric vehicles.
In a sign of the concerns surrounding the transition to battery-powered cars, Ford Motor Co. last month announced plans to cut about 3,800 jobs across Europe, with workers in Germany and the UK set to be the hardest hit.
“Whoever is serious about climate-neutral mobility must keep all technological options open and also use them,” Wissing said in an interview with public broadcaster ARD. “I don’t understand this fight against the car and why people want to ban some technologies.”
–With assistance from Petra Sorge and Katharina Rosskopf.
(Updates with Giegold comment in third paragraph.)
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