Unexpected German and Italian opposition to fuel car withdrawal from Europe

The smooth retreat of the fuel car in Europe has now unexpectedly encountered an obstacle: bickering in the German government. At the last minute, a final decision on the ban on the sale of CO was made last week₂-emissive cars and vans removed from the Brussels agenda. The German liberal coalition party FDP suddenly announced that it could not live with European law after all – to the frustration of government partners and EU diplomats.

A top meeting between Berlin and Brussels this Sunday yielded nothing. Diplomats in Brussels assume that the ban will eventually pass, but the postponement of the vote is very unusual and also illustrates growing headwinds for European climate plans.

In October, the EU reached a resounding agreement on phasing out passenger cars with a fuel engine by 2035. The law is an important building block of the ‘Green Deal’ with which Europe aims to become climate neutral by 2050. Until recently, Germany and Italy also seemed to support the ban. But now that the law has to be stamped by EU ministers, normally a formality, both countries unexpectedly set up a blockade.

New uncertainty

German transport minister Volker Wissing (FDP) stated at the beginning of last week that he can only agree to the proposal if the European Commission guarantees that the sale of cars on ‘CO₂-neutral fuels” – also known as ‘e-fuels’, such as fuels made with green hydrogen, for example – will also remain permitted after 2035. Last year, the Commission indeed promised to look into whether the use of such fuels fits in with the climate goals in the future. But no binding agreements were made on this: experts disagree about how clean fuel can become, and it seems impossible that they will become available on time and at an affordable price. The unexpected German demand came as an unpleasant surprise to Brussels.

All the more so because Italy had also been turned before, and there were enough no voters to block approval. Italian Transport Minister and Deputy Prime Minister Matteo Salvini the postponement of the vote on Twitter a “big win”. The new right-wing government that took office in Rome last autumn is a lot more critical of climate plans than its predecessor.

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Yet it is especially the German resistance that stands out. Government parties SPD and the Greens are strongly in favor of the ban and the fact that coalition partner FDP is now suddenly obstructive has led to considerable tensions. The liberals are doing badly in the polls and now positioning themselves as defenders of the auto industry seems like an attempt to polish their own profile. MEP for the Greens Michael Bloss spoke on Twitter of “a disgrace to Germany” with which the country makes itself “completely unbelievable”. It is striking that Audi boss Markus Duesmann also turned against the German resistance and emphasized that new uncertainty about the end date is disastrous for the industry.

‘On the right track’

But it is not only in Berlin and Rome that opposition to the ban on fuel cars has grown in recent months. Headwinds also arose in Brussels, after various green plans were adopted relatively smoothly in recent years. In recent months, high energy prices and competition with the United States have fueled fears in Europe about the exit of important industries. It feeds a considerable lobby to weaken climate policy and postpone new plans.

At the end of last year, European Commissioner Thierry Breton (Internal Market) also suddenly openly questioned the end date for fuel cars, citing the major consequences for the labor market. The car industry is an important engine for the European economy – and especially for those in Germany and Italy. In Germany alone, 800,000 people work in the sector, which generates an annual turnover of more than 400 billion euros.

Still, it is widely expected that the car law can still be passed later this month. In Brussels, hard work is being done on a text proposal that gives the German liberals sufficient guarantees, but at the same time does not stipulate anything about ‘clean fuels’. Wissing told German media on Monday that the talks are “on the right track”.

E-fuels Particularly in favor of industry itself

The usefulness of synthetic fuels, also known as e-fuels, has been the subject of discussion for many years. These fuels are made with, for example, green hydrogen and green electricity, making them much cleaner than petrol. Many experts don’t see this. According to them, it is absolutely not (cost) efficient to use electricity to make fuels, instead of letting this electricity flow directly into an electric car. There is also hardly any production capacity for these fuels.

On the other hand, there are players from the car industry itself and governments of countries with many car factories. They like to present e-fuels as a vision of the future. That is not very strange; an engine on synthetic fuels is comparable to the current fuel engine. The European car industry has mastered the technology of the fuel engine to perfection. E-fuels require relatively few adjustments. On the other hand, the switch to battery cars means a lot of uncertainty, and probably job losses as well. Far fewer people are needed to build electric cars than fuel engines.

Ford announced at the end of February that it would cut some 3,800 jobs in Europe. That was seen by some commentators as the prologue to an impending wave of layoffs. Not least among suppliers: some of them are even more dependent on the fuel engine than the car manufacturers themselves. It is no coincidence that supplier Bosch is one of the most vociferous proponents of synthetic fuels.

Yet it is by no means the case that the entire car industry advocates synthetic fuels. Former Volkswagen CEO Herbert Diess often spoke negatively about the efficiency of e-fuels, and propagated electrification wherever he could. This led to tensions within the German trade association for cars, which did draw attention to e-fuels. Diess’ successor, Oliver Blume, who took office in September, is less negative about synthetic fuels. He announced soon after taking office that these could be useful.

Milo van Bokkum

A version of this article also appeared in the newspaper of March 7, 2023

New uncertainty

‘On the right track’

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