Germany and Italy are threatening to block a European Union ban on new combustion-engine cars, putting its green goals at risk.
(Bloomberg) — Germany and Italy are threatening to block a European Union ban on new combustion-engine cars, putting its green goals at risk.
The countries are demanding the EU executive come up with a promised proposal to exempt vehicles that use climate-neutral synthetic fuels. Poland and Hungary have also signaled their opposition to the plan, which requires carmakers to reach a zero-emissions target by 2035. Member states had provisionally agreed on the plan last year.
Germany successfully lobbied for a loophole in the rules, under which the European Commission agreed to make a proposal for registering vehicles running exclusively on CO2-neutral fuel after 2035.
German Transport Minister Volker Wissing said Wednesday that the Commission had failed to deliver the proposal, so the government in Berlin is unable to give its approval for the wider plan in a final vote by EU government ministers due March 7.
Overruling a deal made between lawmakers and member states at this late stage would likely be politically toxic, with the vote next week normally seen as a rubber stamp. A preliminary vote by EU officials on the issue due Wednesday was postponed to Friday.
“We need e-fuels as there is no alternative if we want to operate our vehicle fleet in a climate-neutral way,” Wissing said in an interview with public broadcaster ARD.
“Whoever is serious about climate-neutral mobility must keep all technological options open and also use them,” he added. “I don’t understand this fight against the car and why people want to ban some technologies.”
The German 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 BMW AG, Mercedes Benz and Volkswagen with components for their combustion-engine cars.
In Italy, the auto industry contributes about 8.5% to the economy, employing about a quarter of a million workers.
Europe’s automotive lobby group said it is “carefully” monitoring the discussions on the ban and is confident the legislative process will take its course. Spiraling inflation and the price of batteries increasing for the first time in over a decade mean affordability risks becoming a “bigger obstacle” in the transition to zero-emissions, the Brussels-based group ACEA said in emailed comments in response to a Bloomberg query.
“Policy makers must therefore also address emissions from the existing fleet of vehicles on the road,” ACEA said. “At the end of the day, it is all about slashing emissions, not about getting rid of a technology. As the current energy crisis demonstrates, diversification is essential to improve Europe’s resilience.”
An EU spokesperson said that a transition to zero-emission vehicles was absolutely necessary to meet the bloc’s target of cutting emissions by 55% by the end of the decade — on the path to climate neutrality by the middle of the century. Road transport is one of the most carbon-intensive sectors in the EU, generating about a fifth of the bloc’s emissions.
All-Electric Future
Automakers have already moved well down the path of an all-electric future with unprecedented investments into the battery supply chain and new models.
While sales of electric cars are taking off, concerns over patchy charging times and comparatively high costs of an EV haven’t dissipated with Stellantis NV Chief Executive Officer Carlos Tavares warning of deep upheaval if consumers no longer have access to affordable vehicles. EVs are also less complex to make, triggering job cuts.
As carmakers ploughed billions into electrification, their approaches differed. BMW has stuck with a plan to offer buyers globally a range of technologies, including combustion-engine cars and hydrogen fuel-cells because of expected differences in regulation and uptake.
Concerns about the EU’s push have surfaced elsewhere too with Internal Market Commissioner Thierry Breton in November urging manufacturers to keep making combustion cars that help create quality jobs and drive exports.
Germany’s Wissing is a member of the pro-business Free Democratic Party, the most junior member of Chancellor Olaf Scholz’s three-party coalition, and his latest comments prompted some pushback from elsewhere in the ruling alliance.
The FDP has been trying to raise its profile in the government in recent months following a series of poor performances in regional elections and amid waning support in voter polls.
Matthias Miersch, deputy chair of the parliamentary group for Scholz’s Social Democrats, told Deutschlandfunk radio that the government supports the 2035 target to phase out combustion-engine vehicles.
‘Very Expensive’
“E-fuels are only suitable for a certain type of vehicle,” Miersch said. “And they will be very, very expensive compared to battery technology.”
Italy’s right-wing government led by Giorgia Meloni has long been critical of the plans to ban new combustion-engine cars. Deputy Premier and Transport Minister Matteo Salvini said that such a plan “makes no sense” and puts thousands of jobs at risk.
“The use of clean fuels compatible with combustion engines will allow the continuation of a green transition without economic impact on citizens,” according to a statement Tuesday from the environment ministry in Rome.
–With assistance from Joshua Gallu, Andra Timu, Ewa Krukowska, Natalia Ojewska, Kamil Kowalcze, Monica Raymunt, Albertina Torsoli, Elisabeth Behrmann, Niclas Rolander and Petra Sorge.
(Updates with comment by ACEA group in 10th, 11th paragraphs)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.