Under pressure from Germany, EU eases ban on combustion engines – 03/25/2023 – Market

The European Commission and Germany announced this Saturday (25) that they reached an agreement to unblock a key text of the European climate plan on CO2 emissions, thanks to the easing of the ban on thermal engines from 2035.

Germany surprised its European partners at the beginning of March by blocking at the last minute a text calling for a zero reduction in CO2 emissions from new vehicles.

The text, which was approved by the European Parliament in February, then imposed a 100% electric motorization for new cars sold from 2035 onwards in the block.

To justify this change, Berlin asked the Commission for a proposal to pave the way for vehicles running on synthetic fuels.

This technology, still under development, would consist of producing fuel from CO2 from industrial activities using low-carbon electricity.

The system, advocated by some German and Italian manufacturers, would make it possible to extend the use of combustion engines from 2035.

In recent weeks, the Commission has negotiated with Germany to get out of the blockade.

“We have reached an agreement with Germany on the future use of synthetic fuels in cars,” European Commissioner for the Environment Frans Timmermans announced on Twitter on Saturday.

“We will work from now on to have the standard CO2 regulation for cars adopted as soon as possible,” he added.

In turn, the German Minister of Transport, Volker Wissing, informed that “vehicles equipped with a combustion engine may be registered from 2035 if they use exclusively neutral fuels in terms of CO2 emissions”.

The Swedish presidency of the EU indicated shortly afterwards that the regulation on CO2 emissions from cars will be submitted to the ambassadors of the 27 countries of the bloc on Monday, in Brussels, so that the text can be definitively approved at a meeting of ministers of Energy in Tuesday.

Solution questioned by environmentalists

Synthetic fuels are questioned by environmental NGOs who consider them expensive, large consumers of electricity for their production and polluting, for not eliminating nitrogen oxide (NOx) emissions.

“How angry! The Commission gives way to Germany”, protested environmentalist MEP Karima Delli.

The president of the Environment Committee of the European Parliament, the liberal Pascal Canfin, said that the text does not change “the rule of 100% of cars with zero emissions until 2035”. But he warned that he would be vigilant with the carbon neutrality of authorized thermal engines.

Many experts doubt that this solution can prevail in the market compared to electric cars, whose price should fall, according to forecasts for the coming years.

In addition, the sector largely anticipated European regulations and invested heavily in the manufacture of electric vehicles.

And even if synthetic fuels, which do not yet exist, work well, “they will not play an important role in the medium term in the private vehicle segment”, said Markus Duesmann, president of Audi (part of the Volkswagen group), to the German weekly Spiegel.

Due to their cost, these fuels will only make sense when applied to luxury cars “like the Porsche 911 or the Ferrari”, said Ferdinand Dudenhöffer, an expert at the Center Automotive Research in Germany, who does not see this modification as “an important change” for the energy transition in the EU.

Berlin’s turnaround was due to an initiative by the FDP liberals, a small party that has lost five consecutive regional elections.

The FDP hopes to assert itself in the face of environmentalists, presenting itself as the defender of the automobile and betting on the hostility of a large part of the population to the ban on combustion engines.

To preserve the unity of his coalition, the head of the German government, the Social Democrat Olaf Scholz, preferred to side with the FDP’s demands.