EU Takes Key Step Toward Ending Era of Combustion-Engine Cars

By Bloomberg

Mar 28, 2023

image is BloomburgMedia_RS6HCIT1UM1001_28-03-2023_12-14-22_638155584000000000.jpg


European Union officials signed off on a deal that effectively ends the sale of most new combustion engines from 2035 after Germany received provisions for how certain high-end vehicles may get a future exemption if they run solely on e-fuels.

Energy ministers from the bloc’s 27 member states formally adopted rules Tuesday that will mean carmakers will have to slash CO2 emissions to zero over the next 12 years. Germany dropped its opposition to the plans over the weekend after a deal was reached with the EU’s executive arm on how cars running entirely on e-fuels will be allowed to count toward the bloc’s zero climate targets.

The last-minute deal is a concession to high-end sports car brands like Germany’s Porsche, but is expected to have little effect on the plans of most major manufacturers. 

“There is no doubt about the direction of the car industry as a whole,” Swedish energy minister Ebba Busch told reporters Tuesday. “The way I see it, Sweden now reinforces its competitive advantage, while Germany may be buying more time to catch up.”

The approval by ministers is the final step in the EU regulatory process and is usually a formality. But a last-minute objection by Germany delayed things by almost a month as the commission rushed to provide the country with assurances on e-fuel vehicles. The European Parliament signed off on the rules last month. 

The bloc’s executive branch will now put forward rules to allow e-fuel cars on Europe’s roads, according to a statement seen by Bloomberg. It will then propose regulations in the fall that would allow them to contribute toward the bloc’s emissions targets. 

If that proposal is rejected by parliament or member states, the commission said it would pursue a different procedure to work toward e-fuels.

E-fuels, made using renewable energy and carbon dioxide captured from the air, aren’t seen as a viable solution for the vast majority of cars, given their high cost and current lack of availability. 

Instead, the bulk of carmakers in the region are expected to remain focused on battery-powered vehicles.

©2023 Bloomberg L.P.

By John Ainger


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