Brussels makes e-fuels offer to resolve spat with Germany

The European Commission is seeking to resolve its spat with Germany over a proposed EU ban on vehicles with combustion engines by suggesting new models running on carbon-neutral e-fuels could be sold in the bloc after 2035.

Under the draft proposal, a new category of vehicle would be created for cars that could only run on such fuels — so-called “e-fuels only”. They would be fitted with technology to prevent them using traditional fossil fuels such as petrol and diesel.

However, it was still unclear on Tuesday whether Germany, whose car industry accounts for around a fifth of the country’s industrial revenues, had accepted the proposal. The German transport ministry said only that it was continuing to consult with the commission on a possible solution to the dispute.

E-fuels are produced using electricity from renewable hydrogen and other gases and are often considered “carbon neutral”. But the technology is at an early stage of development.

EU member states and the European Parliament passed a law last year that would ban the sale of new petrol and diesel engines in the bloc from 2035. The ban was a key part of the EU’s effort to cut emissions by 55 per cent by 2030 compared to 1990 levels.

A final rubber-stamp vote by member states was scheduled for earlier this month, paving the way for the law to enter force. But Germany raised last-minute objections, effectively scuppering the vote.

Talks have been held since then to try to bring Germany back on board and there were hopes that a deal might be reached ahead of this week’s EU summit in Brussels.

Anna Lührmann, the German state minister for Europe, fuelled those hopes on Tuesday, saying before a ministerial meeting in Brussels: “I assume that talks [on a solution] will be wrapped up before the summit.”

But a German transport ministry spokesman was more ambivalent. The ministry was “liaising closely with the commission to find a solution that offers a reliable path to allowing cars with internal combustion engines to be sold after 2035, as long as they run exclusively on e-fuels”, he said.

“We are interested in a swift clarification, which must be durable and binding,” the spokesman said, adding that the ministry was “carefully examining” the options.

The commission said on Tuesday it was confident a solution could be found that would “clarify the issue . . . about the role of e-fuels in the future”.

Germany’s transport ministry wrote to the commission last week setting out some of its demands. It said there should be “legally binding steps” to implement the resolution on e-fuels that was part of the legislation on the combustion engine phase-out.

It also said cars running on e-fuels should count towards existing targets for emissions reductions.

An EU official close to the talks said the ministry’s request in the letter for a supplementary act laying out provisions for e-fuels was “problematic”. 

A senior EU diplomat said it was “very much up to the German transport minister and the commission how they can solve this . . . if they cannot conclude it will cast some sort of vibe [over other climate-related regulations].”