London: The European Union has bowed to pressure from Germany’s powerful automotive industry and will allow new combustion engine cars to be sold past 2035, provided they run on climate-neutral fuel.
Cars that run climate neutral or so-called synthetic fuels, such as e-methane or e-kerosene will now be exempt in a major concession to luxury car manufacturers such as Porsche and Ferrari, which remain laggards in the transition to electric vehicles.
An installation by Greenpeace activists shows an SUV that is seemingly rammed into the pavement in front of the Brandenburg Gate in Berlin, Credit:Getty
Synthetic fuels are made with captured CO₂ and hydrogen produced from renewable or low-carbon electricity.
The new EU laws form a key part of the bloc’s ambitious net-zero targets which first require all new cars sold by 2030 to emit 55 per cent less carbon dioxide compared to 2021 and then by 2035 for all new cars sold to emit zero.
Germany’s last-minute threats frustrated some of its EU partners, but the government in Berlin said it had won key assurances the Brussels rules would be technology-neutral and would leave space for e-fuels to be used in a zero-emissions framework.
“This paves the way for vehicles with combustion engines that only use CO2-neutral fuels to be newly registered after 2035,” German Transport Minister Volker Wissing said.
Wissing is a member of the pro-business Free Democratic Party in the German coalition government which has clashed with its partners, particularly the Greens Party, over climate and energy policies. The German media has speculated that the FDP was posturing on the laws in the wake of poor election results.
A breakthrough came after weeks of talks with the European Commission and pressure from Germany’s EU partners irritated at a last-minute move by the government in Berlin to block the legislation. Representatives for Spain, France, and the Netherlands had said the text was closed and could not be reopened.
“As a matter of principle, we don’t like this approach. We think it’s not fair… This is not a good and nice movement coming from Germany,” Teresa Ribera, Spain’s minister for the ecological transition, said. “I hope we learn that we cannot take this as a precedent to be used whenever because this could mean difficult times for Europe.”
But Wissing argued Germany needed exemptions for e-fuels to protect its motor industry as the switch to electric cars could cost hundreds of thousands of jobs over the coming decades, with EVs requiring fewer parts than combustion engines.
The German automotive industry – which is home to brands such as Volkswagen, Audi and BMW – recorded total revenue volume of €410.9 billion ($665 billion) in 2021 and employs around 457,000 workers.
The move has divided European nations, with Poland voting against the legislation, but they did not have Germany’s veto power. Italy, which abstained along with Bulgaria and Romania, argued unsuccessfully for additional guarantees for the use of biofuels made from biomass, such as wood waste.
The European Commission is expected to propose new rules regulating the sale of combustion engine cars running on e-fuels by the end of the year.
While proponents argue e-fuels are carbon-neutral because the captured CO2 used in the fuel mix offsets the one resulting from the engine combustion, critics say capturing carbon just to release it again results in a net contribution of greenhouse gasses in the atmosphere.
The European Union had planned to ban sales of all new cars with combustion engines by 2035.Credit:AP
Cars that run on synthetic fuels also emit tailpipe pollutants like carbon dioxide, nitrogen, and sulfur oxide. While they are marketed as emitting substantially fewer pollutants than traditional combustion engines, real-world tests have cast doubt on that assertion.
The International Council on Clean Transportation, an independent research organisation based in Washington, has estimated that, on average, 48 per cent of renewable electricity used to convert e-fuels into liquid is lost along the process, while up to 70 per cent of the fuel’s energy is lost upon combustion.
Currently, there is no widely available vehicle with an engine that runs entirely on synthetic fuels and because of the early stage of technology and its cost, it is likely that synthetic fuel-powered engines will only be used in luxury vehicles.
Alex Keynes, clean vehicles manager at green lobby group Transport and Environment, said German Chancellor Olaf Scholz’s government had threatened to pull the rug from under the green European deal “for the sake of saving polluting combustion engines”.
“The higher cost of e-fuels will mean that only the wealthy could afford them while everyone else could be pushed into getting around the rules and using fossil petrol instead,” he said. “Motorists and the climate will be the losers.”
Car manufacturers including Volvo and Ford have also attacked the idea, saying that the industry had invested heavily in electric vehicles.
Volkswagen brand boss Thomas Schafer called the e-fuels debate “unnecessary noise”, with his company planning to phase out internal combustion engine cars in 2033. “Why spend a fortune on old technology that doesn’t give you any benefit?”
Jan Huitema, a member of the European Parliament for the Dutch liberal party, said he was glad that the EU had finally endorsed the deal on CO2 standards for cars and vans.
“Any possible future proposals concerning the use of e-fuels will be thoroughly assessed, both on their content and their legal basis.”
Electric and other zero-emissions vehicles are a key technology in efforts to decarbonise road transport, which is a sector that accounts for 16 per cent of global emissions.
Compared with 2020, sales nearly doubled to 6.6 million in 2021, bringing the total number of electric cars on the road to 16.5 million. The sales share of electric cars increased by 4 percentage points globally in 2021. To meet net-zero targets, their sales share will need to increase by just under 6 percentage points per year, according to the Internation Energy Agency.
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