Talk about a legislative car crash. Ambitious plans by the EU to ban the sale of new vehicles powered by internal combustion engines by 2035 have been thwarted after last-minute opposition by Germany, the powerhouse of Europe’s car industry. What was meant to be a simple rubber-stamping by ministers this week of measures agreed last year by member states and recently approved by the European parliament has instead been indefinitely postponed. Not only does Germany set a terrible example to other countries tempted to hold legislation hostage to national interests, it also threatens the credibility of Berlin on the green transition, and that of the EU. The bloc’s proposed ban is a key component of its target to reach carbon neutrality by 2050. That journey has now hit a roadblock.
The dangers of a changing climate require a global shift from fossil fuels to cleaner alternatives at a scale and pace never attempted before. It is necessary to remove one of the biggest contributors to the climate emergency. There will be painful trade-offs, including job losses in polluting industries. In the auto industry’s case, the figures are stark: scrapping internal combustion engines in favour of electric vehicles could lead to 40 per cent fewer workers, reckons the chief executive of Ford, which has just cut 3,800 jobs across Europe. Given that Germany’s traditional car manufacturing industry makes up a fifth of the country’s industrial revenues, it is easy to understand why its politicians may be keen, particularly in a cost of living crisis, to preserve jobs in one of the country’s most totemic industries.
Without Berlin’s backing, the combustion-engine ban will not pass. Italy, home to the Ferrari, is supporting Germany. Poland has already stated its opposition to the law, while Bulgaria has said it will abstain. Germany is insisting that the European Commission includes an exemption for cars using so-called e-fuels, synthetic fuels made from hydrogen and carbon dioxide. E-fuels can be used by regular engines, which could mean a lifeline for traditional manufacturers. But e-fuels are far from being the panacea they are sometimes presented as: they are expensive, inefficient and emit as much nitrogen dioxide as burning fossil fuels would, even if they are technically climate neutral.
Neither are manufacturers particularly pushing e-fuels, beyond Bosch, the German engine supplier considered a laggard on battery manufacturing. Porsche wants to continue using engines for its 911 model, and Ferrari has said it is considering — although is yet to commit to — using e-fuels. But other German and Italian carmakers, including Volkswagen, Fiat and Mercedes-Benz, have bet on EVs for the future and have set dates for the phaseout of traditional engine manufacturing.
Infighting among Germany’s ruling three-party coalition goes some way to explaining how the current impasse has been reached. From both a productivity and a climate perspective, the country’s politicians have to prioritise clean energy and find ways to address the resulting pressures. But the debacle over engines highlights that while the EU is among the world’s leaders in setting clean-energy targets, those now need to be matched with concrete action to meet them and to attenuate the collateral damage of doing so. Brussels must also consider how meaningful targets are if they are not enforced: France missed its renewable energy target from 2020, the only state to do so, and the commission is yet to decide whether and how to place sanctions on it. Transitioning to carbon neutrality by 2050 will be fiendishly difficult. But given that member states agreed to targets, it is now incumbent upon them to do all they can to meet them.
