(Bloomberg) -- Chancellor Olaf Scholz said Germany and the European Commission are “on the right track” toward settling a dispute over banning combustion—engine cars and Dutch Prime Minister Mark Rutte raised the prospect of a resolution “in the coming days.”
The government in Berlin raised last-minute objections to the ban and demanded that cars running on so-called e-fuels should be exempt, irritating some EU partners but also drawing support from others including Italy. The push to phase out combustion vehicles is a key part of the EU’s green strategy and officials are trying to prevent the landmark legislation unraveling.
Speaking to reporters before Thursday’s EU summit in Brussels, Scholz reiterated Germany’s position that the commission needs to make good on a promise to come up with a regulation that would enable new cars running on e-fuels to be registered after the 2035 cut-off date.
“It is now only a matter of pragmatically finding the right way to implement this promise,” Scholz said. “And if I understand the talks between the commission and the German government correctly, as far as the responsible commissioner and the responsible minister are concerned, then everything is on the right track.”
In an effort to break the deadlock, the commission has proposed a road map for how cars running on e-fuels could be considered carbon neutral. It 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 2035.
Germany’s bid to get an exemption for e-fuels has been led by the business-friendly Free Democrats, the smallest member of the three—party alliance in Berlin.
FDP Transport Minister Volker Wissing also sounded upbeat on the prospects of resolving the dispute in an interview earlier Thursday with Deutschlandfunk radio.
“We are talking now in a very concrete and detailed way,” Wissing said, adding that it was “a very complicated legal process” that required “a certain thoroughness.”
Italian Prime Minister Giorgia Meloni told reporters that while her government was committed to the green transition, it shouldn’t be the EU that decides what technologies are used to achieve climate goals.
“There are technologies where Italy, and therefore the EU, are potentially on the frontline so the decision to focus on technologies de facto held by powers outside the EU is a choice that won’t favor competitiveness,” she said.
Latvian Prime Minister Krisjanis Karins was highly critical of Germany’s stance, highlighting the anger among some member states that Scholz’s government waited until almost the very end of the legislative process before voicing its concerns.
“This is somewhat puzzling that a government after all agreements have been made suddenly takes a reverse step,” Karins told reporters, saying that represented “a very, very difficult sign for the future.”
“I find it very troubling because if one member state can do it what will stop the next? This is not a direction we need to go,” he said. “The entire architecture of decision making would fall apart if we all did that.”
--With assistance from Jasmina Kuzmanovic, Jorge Valero, Ania Nussbaum, Niclas Rolander, Slav Okov, Natalia Ojewska, John Ainger, Ewa Krukowska, Lyubov Pronina, Jan Bratanic, Daniel Hornak, Stephanie Bodoni, Alessandro Speciale and Katharina Rosskopf.
©2023 Bloomberg L.P.
BNN Bloomberg Picks
Carbon tax, trade barriers: experts on how to reduce food costs
Variable rate mortgage holders on the hook for thousands in interest: report
Half of Canadians don't think they will be ever buy a home: survey
How can mortgage holders prepare for higher rates at renewal?
Energy prices are driving inflation. What will central banks do?
70-year amortization periods not realistic: OSFI