EU considers watering down ‘CO2 neutrality’ standard for eFuels

EU considers watering down ‘CO2 neutrality’ standard for eFuels

EURACTIVE — 2023-09-01

News from Brussels

The European Commission is considering watering down a carbon neutrality requirement for e-fuels to allow combustion engine cars to be sold after 2035, internal documents show, suggesting a split in the EU executive on handling the matter.

Two years ago, the Commission tabled legislation to reduce emissions from new cars to zero by 2035 as part of reaching climate neutrality by 2050. 

New rules, adopted earlier in 2023, essentially ban the sale of new cars with internal combustion engines from that date unless they can run on fuels that emit no carbon dioxide. 

The German car industry pushed the carbon–neutral fuels mandate with backing from Berlin, which blocked the final adoption of the text until its demands were met.

The stalemate ended in March 2023, when the European Commission brokered an agreement with Berlin to continue allowing the registration of new cars with combustion engines even after 2035, provided they run “exclusively on CO2 neutral fuels”. 

However, an internal dispute has now emerged in the Commission on defining “CO2 neutral fuels”, pitting the directorate-general in charge of the internal market (DG GROW) and the directorate in charge of climate action (DG CLIMA), according to internal documents seen by EURACTIV.

Under the March deal, the Commission committed to creating a new category of cars that can only be filled with synthetic fuels produced with electricity, often called e-fuels, and present a delegated act to define how those vehicles can contribute to climate neutrality.

But DG GROW’s proposed definition of “CO2 neutral” fuels has been met with strong resistance by DG CLIMA, which fears the move will water down the EU’s climate ambition.

In its draft proposal, DG GROW refers to “CO2 neutral” fuels as the definition of “renewable fuels of non-biological origin” (RFNBOs), which is laid out in the EU’s Renewable Energy Directive.

However, the definition of RFNBOs in the renewables directive only provides a 70% reduction in CO2 emissions compared to fossil fuels. 

For DG CLIMA, this “risks hampering the achievement of our climate targets, creating a precedent for considering a ‘carbon neutral’ technologies reducing only 70% emissions as compared to fossil fuels,” according to the document dated 19 June.

Therefore, it is imperative that the definition only includes renewable transport fuels of non-biological origin (RFNBO), which have greenhouse gas emission savings of 100%,” DG CLIMA adds.

E-Fuels concession

E-fuels can be carbon-neutral if made with green electricity and CO2 taken from the atmosphere so that tailpipe emissions are offset over the whole lifecycle of the fuel.

Their inclusion into the EU rules was a concession to Germany’s Transport Minister Volker Wissing (FDP/Renew Europe), who argued at the time that EU rules should not limit options on how to reach climate neutrality in road transport.

In a second step, the new category of cars should, therefore, be allowed to count towards the EU’s CO2 standards for cars and vans, according to the agreement reached in March.

EURACTIV understands that the disagreement is yet to be resolved.

A spokesperson said the Commission was “working on a draft e-fuels implementing act under the Euro 6 Standard Regulation” and “plans to consult Member States in the coming weeks in view of a vote in the Committee later this year.”

A working group meeting of the EU’s 27 member states’ representatives is planned for the beginning of October.

Does ‘CO2 neutral’ mean zero emissions?

E-fuel proponents hailed the proposal by DG GROW.

The current calculation of the carbon footprint of eFuels includes not only the actual climate-neutral use phase but also the emissions of the upstream, including transport and the production of the process components,” said Ralf Diemer, CEO of the eFuel Alliance, a trade organisation. While “in the long term,” it was also possible to reduce those emissions to zero, this was “currently not technically feasible,” Diemer added.

Therefore, we support the proposal to focus the calculation on the use phase, just as with electric vehicles,” he told EURACTIV.

In a June 2022 memo, the eFuel Alliance also called for more flexibility regarding the sources of CO2 used for e-fuel production, arguing that it should not only be allowed to use CO2 captured from the atmosphere but also from existing sources, such as industrial plants.

Members of the eFuel Alliance include German carmaker Porsche, engineering group Bosch, and oil groups ExxonMobil, Repsol and Eni.

Campaigners, meanwhile, are up in arms, saying that if carbon-neutral fuels are to be allowed at all, they should be zero emission.

For a fuel to be CO2 neutral, it has to deliver 100% greenhouse gas emission savings,” said Alex Keynes, clean vehicles manager at Green Group Transport & Environment (T&E).

And the only way these fuels can do that is if they are produced using 100% additional renewable electricity and captured CO2 [from the atmosphere] with Direct Air Capture,” he told EURACTIV