POLITICO — 2023-03-28
Automotive Industry
No, Germany's government hasn't just saved the internal combustion engine.
Weeks of threats and bluster that saw Berlin go head-to-head with Brussels ended on 2023 March 28 with EU energy ministers approving an agreement that sets a zero-emissions limit on the sale of new cars and vans from 2035.
That's exactly the same deal that Germany and a small group of allies — Italy, Poland, Bulgaria and the Czech Republic — refused to accept unless the European Commission changed the rules to make room for cars running on so-called e-fuels — a synthetic alternative to fossil fuels made from hydrogen and CO2 that is cleaner than conventional gasoline but still emits some greenhouse gases.
It's being touted as a huge victory by Berlin, but the final effect is likely going to be a lot less than Germany's auto suppliers, high-end carmakers and the liberal wing of the political establishment — particularly the Free Democratic Party, which controls Berlin's transport ministry — were hoping for.
That's because any changes to the rules — expected to be proposed by the Commission this fall — would be open to scrutiny by EU capitals and by the European Parliament, which has insisted it won't allow the 2035 agreement to be reopened.
"I have the feeling that Germany settled for two birds in the bush instead of one in its hand," said one French government official, adding that it is "not certain" the technical legislation needed to deliver on Berlin's demands will ever be passed.
Under the deal hatched last week between Berlin and Brussels, the Commission promised to quickly carve out a legal category for cars running on e-fuels only, which would require in-vehicle fuel detection technology that doesn't yet exist. The EU executive then plans to tack a delegated act onto the 2035 law to exclude that new class of vehicle from the zero-emissions requirement of the CO2 targets.
That's going to take some legislative acrobatics to deliver.
Delegated acts are supposed to be used to supplement or amend non-essential elements of EU law; they enter into force if there is no objection from member countries or the Parliament.
But both the EU legislature and many green-minded countries, led by France, are still smarting over Berlin's unprecedented effort to block a critical piece of EU legislation in its very final stages — and that makes any Commission promises difficult to uphold.
"The damage Germany has done vis-à-vis its partners in the Council and Parliament runs deep," said one European Commission official.
Another French official with the cabinet of Energy Minister Agnès Pannier-Runacher criticized Germany for its blocking effort. "We must be very careful not to weaken the functioning of the European institutions by reopening texts that have been fully agreed," the official said, calling e-fuels an "extremely emerging, almost science-fiction" technology.
Now that ministers have signed off on the 2035 measure, it becomes law once it's published in the EU's official journal | Alexander Hassenstein/Getty Images
René Repasi, a law professor and a German MEP with the Socialists & Democrats, the grouping that includes German Chancellor Olaf Scholz's Social Democrats, has called the Berlin-Brussels deal a "political stunt," saying it is "legally and politically shaky."
Combustion caper
The Parliament twice rejected efforts to include e-fuels in the 2035 legislation during earlier negotiations.
Pascal Canfin, the French liberal lawmaker running the environment committee controlling the file, said only that he'll be "waiting to see" about the "legality" of any future e-fuels delegated act.
Worrying that the delegated act gambit will fall short, Germany also forced the Commission to pledge that it would reopen the 2035 law should lawmakers and countries balk. But again, the Commission would need the backing of other EU institutions to do that, and there is no appetite to jump back into a file that took 18 months to negotiate.
Now that ministers have signed off on the 2035 measure, it becomes law once it's published in the EU's official journal. That means German Transport Minister Volker Wissing "gave up on his veto," said Jens Gieseke, a German MEP from the center-right European People's Party, who has been one of the main cheerleaders in Brussels for an e-fuels exemption. "This was the only thing that was a powerful instrument to make the Commission move.
"They did not achieve anything but made the public believe they have saved the combustion engine," said Gieseke. "They haven't."
If Germany does manage to overcome those hurdles, Chile is waiting in the wings with what it hopes will be a marketable flow of e-fuels.
“There’s a saying: Technological changes are first impossible, then they’re unaffordable, and suddenly they become part of our daily lives," Chile's Energy Minister Diego Pardow told POLITICO. "I see that all the time, and I’m sure that it will also happen with e-fuels."