You are now being redirected to the BCE.ca website (Bell Canada Enterprises), where you can view our Accessibility plan, and submit your feedback using our Accessibility webform.
Mar 21, 2023
EU Makes Offer to Germany to Unlock Ban on Combustion Engines
(Bloomberg) -- The European Union proposed a road map for how cars running on e-fuels could be considered carbon neutral in a bid to convince Germany to stop blocking a planned ban on combustion engines.
Brussels and Berlin are locked in a standoff over the ban, which is a key pillar of the bloc’s green strategy. Germany raised last-minute objections — out of concern for its all-important car industry — and the risk is that without a compromise the landmark legislation could unravel completely.
In a letter to the German government seen by Bloomberg, the European Commission promised to publish a statement that would include timelines and outline regulatory solutions essential for allowing new combustion-engine vehicles running on e-fuels to be registered after the ban is due to take effect in 2035.
New regulations regarding cars using e-fuels would only be offered after member states approved the ban on combustion engines, according to the letter, a step Germany has been blocking. The commission, the EU’s executive arm, stopped short of Berlin’s request to propose additional legislation.
Germany has yet to signal if it agrees with the terms, but there is widespread optimism that a deal can be reached this week, before Thursday’s meeting of EU leaders in Brussels. A spokesperson from the German transport ministry said they had received the letter and that it was a good basis for further talks.
The dispute has exposed divisions within the three-party ruling coalition in Berlin. Germany’s bid to get an exemption for e-fuels has been led by the business-friendly Free Democrats, the smallest party in the alliance which runs the transport ministry.
Part of a wider push to raise the party’s profile in government following a series of poor performances in regional elections, it has especially irritated the Greens. They are going along with it for the time being for the sake of coalition unity but patience appears to be wearing thin.
“We are seeing that the largest ever piece of EU climate-protection legislation is starting to be undone,” Economy Minister Robert Habeck, a member of the Greens who is also the vice chancellor, said Tuesday at a party retreat in Weimar.
“No one has the right to do that,” he added. “That’s why it’s high time that a conclusion is reached, otherwise everything will fall apart.”
Decarbonizing transport is seen as a key pillar of the EU’s goal to cut emissions by 55% this decade on the way to climate neutrality by 2050. But cars hold outsize importance in Germany, where the auto industry employs about 800,000 people and has revenue of about €411 billion ($443 billion), making it by far the largest segment of the economy.
The commission has offered to propose rules before the summer that would allow cars running exclusively on e-fuels, made using renewable electricity and captured CO2, to take to the region’s roads, according to the letter, which was sent last week.
The commission also offered to propose in the next step another legislative update on how to account cars powered by carbon neutral fuels in its rules on emissions standards, in line with provisions agreed last year between representatives of the European Parliament and national governments. That could happen before a scheduled review of the legislation in 2026.
The proposed statement could say that “the commission also intends to propose to amend the regulation setting CO2 emission performance standards for cars and vans so as to place a limited number of cars outside the scope of regular fleet standards, taking into account the climate neutrality objective and the technology openness principle,” according to the letter.
The letter highlights that the EU and Germany are moving toward an agreement to use so-called Euro 6 emissions regulation as the basis for a carve-out for e-fuel vehicles.
Diederik Samsom, head of EU climate chief Frans Timmermans’s cabinet, said in the letter that the choice of instrument was best suited to give industry certainty, while also reflecting parliament’s concerns over re-opening the deal.
Proponents of e-fuels say they’re essentially renewable electricity that’s been converted into a combustible, liquid fuel.
To make it, captured carbon dioxide is combined with hydrogen split from water in a process powered by renewable energy, creating a synthetic hydrocarbon fuel. When burned in a combustion engine, the e-fuels create carbon dioxide. But since it was made from previously captured CO2, backers argue it’s climate neutral.
Opponents say e-fuels are a waste of renewable energy and should be saved for harder-to-decarbonize uses. There are also concerns in the industry itself that an e-fuel exception — even if limited to some sports cars — could blunt the impact of a clear 2035 ban on combustion engines.
Habeck said Tuesday that the behavior of the FDP, which is led by Finance Minister Christian Lindner, is harming Germany’s reputation in the EU.
“We lose debates, we don’t get enough support for our projects,” he said. “German wishes are not being heard. This must now come to an end.”
--With assistance from Katharina Rosskopf, Josefine Fokuhl and Kamil Kowalcze.
(Updates with Habeck comments starting in eighth paragraph)
©2023 Bloomberg L.P.
BNN Bloomberg Picks
Does Canada risk falling behind other countries on LNG exports?
Alberta election: What are the frontrunners' plans for oil and gas?
Jason Del Vicario's Top Picks: May 26, 2023
Freedom Mobile unveils first nationwide plan following Rogers-Shaw deal
Disconnect between employers, employees on in-office work: Survey
Cirque du Soleil plans metaverse game on Roblox