Germany Tightens Pressure on EU to Ease Auto Emissions Rules
(Bloomberg) -- Germany is intensifying a push for greater flexibility in European Union vehicle-emission limits, part of an effort by Chancellor Friedrich Merz’s ruling alliance to bolster the nation’s ailing auto industry.
After a latest round of regular coalition talks late Sunday in Berlin, Merz said his government will be pushing in EU negotiations to ensure that excess emissions above a 90% target won’t have to be fully offset after 2035.
Vehicles powered exclusively by renewable fuels — including “advanced biofuels” — should be immediately counted as zero-emission, and the government also rejects proposed EU mandates to boost EVs in corporate fleets, according to a coalition policy paper distributed Monday in Berlin.
“There must be no cliff edge for these key technologies,” Merz told reporters, reiterating a call for “full technological openness” for vehicle motors. “We are entering the negotiations with Brussels united and with determination,” the conservative leader said.
Merz’s coalition of his CDU/CSU bloc and the Social Democrats is pushing ahead with a bid to ease the burden on domestic carmakers like Volkswagen AG, BMW AG and Mercedes-Benz Group AG that are struggling with geopolitical turmoil and strengthening competition from China.
Germany’s previous SPD-led government had lobbied against a combustion-engine ban and pushed for a carve-out for vehicles running on so-called e-fuels made using renewable electricity and captured carbon dioxide.
“I am firmly convinced that the future of the automotive industry is electric, but that we need flexibility and openness on the way there,” Finance Minister Lars Klingbeil, the vice chancellor and SPD co-leader, said alongside Merz.
Germany’s latest intervention shows the extent to which divisions remain in the EU over how to ensure the region’s carmakers can survive the climate transition while competing effectively with Chinese rivals in the electric-vehicle segment.
The European Commission, the bloc’s executive branch, in December proposed to continue allowing a limited share of combustion vehicles on the bloc’s roads after 2035, having previously agreed on an effective ban.
Under the latest proposals challenged by Germany, emissions from the tailpipe would still have to be cut by 90% by 2035, but carmakers could use green steel and renewable fuels to offset the remaining 10%.
Member states and the European Parliament are negotiating the rules before agreeing their final shape over the coming months.
While Germany is looking for further flexibilities, other car producing countries like Spain and Sweden have warned against any more watering down of the bloc’s climate ambition amid concerns that it could put Europe behind in the race with China to ramp up EV sales.
In recent weeks, car drivers have also been exposed to surging fuel prices resulting from the US-Israeli war on Iran.
In addition to the extra wiggle room on the headline targets, Germany is also looking to suspend further tightening of the so-called utility factor, a metric that is used to calculate emissions from plug-in hybrids.
Critics say that it is based on lab assumptions that significantly understate real-world pollution.
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