EU lawmakers voted to ban the sale of new combustion engine cars in the bloc by 2035 as part of the European Union’s plan to become carbon-neutral by 2050. However, Germany has pushed for a loophole that would allow the sale of combustion engine cars running on synthetic fuels, which could undermine the EU’s green credentials. E-fuels, made using hydrogen and carbon dioxide captured from the atmosphere, are seen as a clean alternative, but they still emit carbon dioxide and have limited supply. Many EU policy makers and climate groups are critical of the exception, as it would slow down the transition to electric vehicles and favor conventional oil. Germany’s objections are driven by the interests of its powerful automotive industry and the desire to maintain existing infrastructure and products. The dispute over the legislation raises doubts about the EU’s ability to implement its climate agenda and may undermine its credibility in achieving climate neutrality. The revised law, allowing some combustion engines running on e-fuels to be sold beyond 2035, is expected to be approved soon.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| EU votes to ban sale of new combustion engine cars by 2035 | Ban on combustion engine cars to reduce emissions | Increase in electric and alternative fuel vehicles on the market | Climate change mitigation and reduction of greenhouse gas emissions |
| Germany pushes for loophole to allow sale of combustion engine cars running on synthetic fuels | Exception to ban on combustion engine cars for those running on synthetic fuels | Continued sale of combustion engine cars beyond 2035 | Balancing ambitious climate policies with the interests of the automotive industry |
| E-fuels made using hydrogen and CO2 captured from the atmosphere | Manufacturing process of synthetic fuels using captured CO2 | Limited supply of e-fuels, high costs, and reliance on renewable energy for production | Potential alternative to fossil fuels, offsetting emissions |
| Germany’s objections driven by interests of powerful automotive industry | Balancing climate policies and interests of automotive industry | Continued use of existing infrastructure and products by industry stakeholders | Economic interests and maintaining competitiveness |
| Concerns about the impact on climate protection and European Union’s credibility | Potential undermining of climate agenda and credibility of EU | Potential delay in achieving climate neutrality and meeting emissions targets | Need to uphold commitments and maintain progress on climate action |