EU postpones vote on internal combustion engine ban amid German objections

(Bloomberg) — The European Union has postponed a key vote on an effective ban on internal combustion engine cars after Germany unexpectedly raised last-minute objections amid concerns about how the bloc’s green plans will affect the industry.

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EU and German officials are in talks on how to reach a compromise on allowing the use of e-fuels in new cars after 2035, and there were signs from Berlin that a deal could still be reached that would see the phase-out can continue.

European Commission President Ursula von der Leyen will meet German Chancellor Olaf Scholz on Sunday on the sidelines of a German cabinet meeting, when the topic is likely to be discussed.

“It is contradictory when the European Commission on the one hand calls for high climate protection targets, but on the other hand makes it more difficult to achieve these goals through overly ambitious regulations,” German Transport Minister Volker Wissing told lawmakers on Friday. the Lower House of Parliament in Berlin, adding that it is up to the EU executive to come up with a viable solution.

EU ministers were due to vote on Tuesday on what should be routine approval of a deal the bloc struck last year to effectively ban new fossil fuel vehicles from 2035. But Daniel Holmberg, a spokesman for Sweden, who holds the EU’s rotating presidency, confirmed the delay in the vote on Twitter, saying diplomats will return to the issue “in due time”.

The delay reflects concerns that Germany may have abstained — a move that could derail the bloc’s green plans, according to people familiar with the matter.

Some German officials have indicated they believe a deal that will preserve the broader ban is feasible.

“If the committee takes a credible position in talks with the ministers and the German government, I am optimistic that a solution will be found,” Sven Giegold, state secretary of the German Federal Ministry for Economic Affairs and Climate Action, said on Thursday. that negotiations are difficult.

Germany is seeking assurances that the European Commission, the EU’s executive arm, will propose provisions on how so-called e-fuels can be used in internal combustion engine cars beyond the 2035 border. While the bloc’s executive is required to come up with a proposal after consultation with stakeholders, there is no set timetable for such a move, apart from a general review in 2026.

The last-minute hiccup is highly unusual in EU lawmaking, as the deal between the EU’s 27 member states and parliament was struck in October last year and the upcoming vote is mostly a formality. The EU is doing its best to come up with a solution that would reassure Germany, meaning a compromise is still likely even if final approval is delayed.

What are e-fuels and can they make cars run cleaner?: QuickTake

The problem is that designing a carve-out for e-fuels, which are produced from renewable electricity, is likely to be technical and there won’t be much time to reach an agreement before next year’s EU parliamentary elections . It is unclear exactly what guarantees Germany is currently looking for.

Germany’s objections were announced by Wissing on Tuesday evening. His pro-business party, the FDP, wants a more flexible approach to some elements of the European environmental program than other partners in the governing coalition. The FDP, which has suffered a series of setbacks in regional elections, is keen to be seen as a champion of technology choice and support for German jobs.

For his part, Scholz sees synthetic automotive fuels as inefficient and is confident that battery-powered e-cars will eventually prevail and dominate the consumer mobility market, said a person familiar with the matter. His reasoning is that they are expected to be much cheaper in day-to-day running costs than cars that run on synthetic fuel, which require a lot of power in the manufacturing process, the person added.

Decarbonising transportation is seen as a key pillar of the bloc’s goals to cut emissions by 55% this decade on its way to carbon neutrality by 2050, but there are concerns about the impact on the bloc’s dominant auto industry .

Concerns about the transition to electric vehicles became apparent last month when Ford Motor Co. said it will cut around 3,800 jobs across Europe, with workers in Germany and the UK most affected.

Many doubt that e-fuels are the solution, as they are significantly more expensive than conventional fuel and currently very scarce. They also argue that such fuels should be used in aviation, which is more difficult to reduce.

Wissing also said on Friday that the bloc’s plan to impose so-called Euro-7 fuel standards by 2025 – an effort to reduce nitrogen oxides and other emissions – should also be reviewed.

“It is therefore clear to me that we need to take a fundamental look at Euro-7 again,” he said. “The outcome must not jeopardize jobs and mobility must not become a luxury.”

–With help from Petra Sorge, Michael Nienaber and Katharina Rosskopf.

(Updates with Wissing comments from the fourth paragraph)

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