Germany Pushes for Exception in Law Banning Combustion Engines

Germany is negotiating with the European Union to win an exception to the proposed 2035 ban on internal combustion engines to permit cars to run on carbon-neutral synthetic fuels, the country’s Transportation Ministry said on Wednesday.

Berlin’s abrupt decision in early March to seek a change in the measure on the eve of its final vote has caused a rift among E.U. governments and even automakers, and threatens to undermine legislation that is a cornerstone of the European Union’s ambitious plans to make the 27-member bloc carbon-neutral by 2050.

The move is supported by some carmakers including Porsche, but it has provoked criticism from other manufacturers that have begun spending huge sums to shift their production toward electric vehicles in anticipation of the ban.

Ford and Volvo were among several dozen companies that signed a letter on Monday addressed to European leaders, warning that watering down the terms of a transition to electric vehicles could endanger their businesses as well as the environment.

“The lack of a strong regulatory framework could have significant consequences for businesses’ decarbonization plans,” the letter read.

Germany’s Transport Ministry said it was in talks with European Commission regulators seeking a provision in the measure that would allow for the sale of cars with engines that are capable of running only on such synthetic fuels, known as e-fuels. Tim Alexandrin, a spokesman for the ministry, described the talks as “advanced” and “complex.”

The commission is striving to reach an agreement with Berlin before leaders of the 27 member states arrive for a European Council summit on Thursday.

“I am confident that we can find a way to make sure that the interpretation we give to the agreement is also to the satisfaction of the German authorities,” Frans Timmermans, the vice-president of the European Commission who oversees the bloc’s push toward climate neutrality, said last week.

E-fuels are made using electricity generated from renewable sources like wind or solar to separate hydrogen from water, and then combining the hydrogen with carbon dioxide captured from air or other sources. When the resulting fuel is burned in an engine, carbon dioxide comes out of the tailpipe, but the idea is that those emissions are offset by the carbon dioxide removed from the atmosphere to produce the fuel.

But e-fuels tend to be expensive and not easily available, and there are doubts about the ability to scale up production by 2035.

The Rise of Electric Vehicles

If successful in forcing through a carve-out on e-fuels, it would be the latest time that Berlin intervened on behalf of its powerful automobile industry to water down Brussels’ efforts to curb emissions in the transportation sector. More than a quarter of all carbon-dioxide emissions in the E.U. are generated by vehicles, according to government statistics.

But with its 800,000 jobs and annual revenue of about 411 billion euros ($443 billion), the automobile industry flexes outsize influence in Germany, Europe’s largest economy.

It has long held sway over the country’s leaders. Chancellor Angela Merkel personally intervened in 2013 to prevent European legislation that would tighten emissions rules, and four years later, lobbied again to weaken E.U. emissions testing procedures that were intended to prevent cheating of the kind Volkswagen committed with its diesel engines.

This time it is Germany’s luxury car industry that is pushing back against Brussels’ latest attempt to rein in vehicle emissions. Porsche is among the leading proponents of e-fuels and has backed a production facility that opened in Chile last year, even as it continues to develop its popular electric Taycan model.

“E-fuels are a feasible alternative to reduce CO2 emissions rather quickly,” Oliver Blume, who is chief executive at both Porsche and Volkswagen, told reporters last week. He said that the 1.3 billion vehicles with combustion engines already on the global market will still be driven for decades, especially in developing economies, and would benefit from fuel with no net emissions.

“If you look at climate protection as a whole, this is not only a German or a European issue alone, it is a worldwide affair,” Mr. Blume said.

Several companies that supply Germany’s auto industry support including e-fuels in the European rules, including Bosch, Mahle and ZF, as well as major energy companies, including Exxon Mobil.

Italy, home to Ferrari and Fiat, joined the resistance after Germany raised concerns, along with the Czech Republic, Austria and Poland. If enough countries decide not to pass the measure, that could endanger its prospects.

But e-fuels have usually been seen as a future fuel for industrial uses, not cars. Even with plans to increase production, the amount of e-fuels projected to be available in Germany by 2035 would be sufficient to meet only 10 percent of the country’s fuel needs in its air, shipping and chemical industries, according to a study by the Potsdam Institute for Climate Impact Research. Unlike cars, those industries cannot rely on electrification alone to reduce their carbon footprint, the institute said.

Volker Wissing, a member of the Free Democrats party who serves as Germany’s minister of transport, argues that despite such warnings, all options need to be kept open in the push to reach climate neutrality.

“We are convinced that we need every technological solution to achieve our ambitious climate protection targets and keep society mobile,” Mr. Wissing said.

But analysts point out that his party, the smallest of the three partners that make up the government of Chancellor Olaf Scholz, may have been driven by more than just concern for the environment in promoting e-fuels. Since entering the government, the party has seen its popularity nearly halved to just 6 percent, with key state elections planned in Bavaria and Hesse later this year. Challenging Brussels could be seen as a way to reverse that slide by attracting approval from Germans who favor combustion engines.

“The Free Democrats always have to worry a bit about their parliamentary existence,” Uwe Jun, a political scientist at the University of Trier, said, referring to the fact that the party fell out of the German Parliament in 2013 after failing to meet the 5 percent threshold needed for representation.

Senior German government officials insist that they are confident that the Free Democrats will not let the standoff reach a point of actually sinking the European policy, saying that internally, the party has made clear it would accept a compromise.

“It remains our goal to reach an agreement,” Mr. Alexandrin said.

Monika Pronczuk contributed reporting from Brussels.

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