Brussels agrees deal with Germany in spat over combustion engines ban

Brussels has agreed to exempt cars which run on certain types of fuel from the EU’s new law which will ban the sale of combustion engines from 2035, after Germany threatened to block it.

Frans Timmermans, the EU’s climate commissioner, tweeted on Saturday that the European Commission had “found an agreement” with Berlin over the “future use of e-fuels in cars” after more than three weeks of negotiations to save the law.

E-fuels such as e-methane or e-kerosene are made with captured CO₂ and hydrogen produced from renewable or low-carbon electricity. They are often considered carbon neutral, but the technology is at its early stages.

German transport minister Volker Wissing said: “This clears the way for vehicles with internal combustion engines that run on CO₂-neutral fuels only to be newly registered after 2035.”

Wissing had announced earlier this month that Berlin would block the phaseout of internal combustion engines in the bloc, just days before it was due to have its final rubber-stamp vote. He wanted exemptions for e-fuels to protect Germany’s car industry, he said. 

According to some research, including by automotive supplier association Clepa, the switch to electric cars could cost hundreds of thousands of jobs over the coming decades as electric engines require fewer parts than combustion engines.

On Saturday, Wissing said a path and timetable had been agreed to implement the exception from the new law. A separate category would be added to the law to cover cars that only use e-fuels, he said. “We would like this to be completed by autumn 2024,” he added.

A commission official said that an official announcement would be made on Tuesday, when the planned phaseout is expected to be approved by EU energy ministers.

Green groups and some EU member states, including France, had heavily criticised the German move to give e-fuels an exemption from the new law. Car manufacturers including Volvo and Ford have also attacked the idea, saying that the industry had invested heavily in electric vehicles.

The law was agreed last year between the EU’s three institutions, including the council of member states; it is extremely rare for such deals to be reopened. 

The deal does not require text changes to the new law but will create a new category of e-fuel cars in the future, a commission official said. It is expected that vehicles’ engines would have to be adapted so they could run on e-fuels only and not on fossil fuels.

Additional reporting by Guy Chazan in Berlin