EU leaders meet in Brussels to discuss Ukraine and the economy. But will e-fuels rock the summit?

European Union leaders meet today in Brussels to kick off a two-day summit where Russia’s war in Ukraine, the battered economy, trade and migration are set to top the agenda.

Among the proposals on the table will be a new industrial strategy to boost domestic production of green technology and a possible package of €3.5 billion in fresh military assistance for Kyiv, which will act as a top-up to the €2 billion tranche allocated this week.

Both plans, however, will require further negotiations before their definitive approval.

France, in particular, is keen to add nuclear energy to the list of most-favoured projects recognised under the industrial strategy, a request certain to face fierce resistance from countries like Germany, Spain, Austria, Denmark, Ireland and Luxembourg.

The meeting in Brussels comes mere days after Chinese President Xi Jinping and Russian President Vladimir Putin held one-on-one talks in Moscow and committed to prioritise ties.

Speaking to Euronews before the summit, European Council President Charles Michel said the bloc was not “naïve” about the ever-closer links between China and Russia.

But, he noted, the rapprochement should not deter Brussels from engaging with Beijing.

“We need to engage with China, not because we agree on everything with China, on the contrary, but because we need to defend our interests and to defend our principles,” Michel told Euronews.

China is not an official item on Thursday’s agenda but the Xi-Putin reunion is expected to come up during discussions, particularly amid growing fears that Beijing might supply lethal aid to Moscow.

Although Chinese officials have insisted the fears are unfounded, European leaders have nevertheless warned Beijing against taking such a step, calling it a red line and a cause for sanctions.

“It’s important that China supports the international law, the stability through the UN Charter,” Michel told Euronews.

Combustion engine standoff

Another subject that is not part of the agenda but is poised to loom large over the summit is e-fuels.

Earlier this month, Germany took diplomats by surprise when it mounted a last-minute opposition campaign to block the final approval of a proposed regulation that would impose a 100% reduction in CO2 emissions for cars and vans sold after 2035.

The proposed law will target emissions detected at the exhaust pipeline, which means it will effectively ban new sales of diesel and petrol cars after the cut-off date.

Considered one of the key pieces of the European Green Deal, the law has been controversial since its inception but managed to survive negotiations between the EU Council and the European Parliament, which settled on a compromise text that kept the 2035 deadline intact.

MEPs endorsed the draft law last month and passed the buck to member states, who were expected to rubberstamp their text without major fuss.

But at the very last minute, Germany, which hosts a world-class automotive industry, came out against the law and demanded an exemption for e-fuels, an emerging technology that combines hydrogen and CO2 to produce new fuels that can be poured into conventional combustion engines.

The hold-out shocked officials and diplomats in Brussels, who saw it as a betrayal of the long-standing rules of procedure.

The impasse prompted a rare intervention by European President Roberta Metsola, who this week sent a letter to the EU Council warning the blockage “could undermine the credibility of the legislative process and risk eroding trust between co-legislators.”

Despite talks between Berlin and Brussels, the issue remains unresolved and threatens to float heavily over the entire two-day summit.

“It is essential that trust is there,” said a senior diplomat. “When (negotiations) are concluded, the presumption is that it will not lead to changes to the political agreement”

Another diplomat said a deal to satisfy Berlin’s demands could arrive as soon as “next week” but a diplomat from a different country said it was “possible” the deadlock could continue afterwards, as the number of countries who remain opposed to the measure would still constitute a blocking minority.

Italy, Poland, Bulgaria, Slovakia, Hungary and the Czech Republic are among those considered most likely to resist the proposed ban, although officials insist the alliance is not clear-cut.