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Germany and Italy force EU to delay 2035 ICE Ban

Monday, 13 March 2023

The automotive world in recent years has been facing one of the greatest transformations in its history. The energy transition is now a necessity in this field as well. Zeroing out polluting emissions, due to CO2 and NOx caused mainly by exhaust gases from ICVs fuelled by gasoline and diesel, is now a duty of all the most developed nations, starting with Europe. 

It is a different story, in fact, for those Asian and African countries that pay little attention to this issue, where pollution caused not only by the automotive industry but also by factories has reached unsustainable levels. To achieve this, there has been a swift shift towards the development of electric cars, which with zero emissions at the tailpipe, benefit from an increasingly developed and widespread charging system and high battery remanufacturing technology. However, it should be emphasized that this know-how differs from continent to continent, from country to country.

While electric vehicles are now an unstoppable global choice, much remains to be done locally. If the countries of Northern Europe, such as Norway or the Netherlands, are now ready to abandon the manufacture and use of ICVs in favour of BEVs, with a complete network of charging points and a modern road network, the same cannot yet be said for other European nations, such as Italy, Spain, but also Germany, France and Eastern European countries. Another cause for concern is the data on electric vehicle sales, which show a sharp drop in sales in the first three months of 2023, mainly due to the lack of incentives to purchase BEVs, which still have a higher cost than ICVs. 

The bombshell news
The vote on the EU's sales ban for combustion engine cars has been postponed in the Council of the EU after several nations cast doubt on the decision, upsetting a part of the EU's package to combat climate change. This development stands out as a bombshell in light of the fragmentation in the various European countries. A vote in the EU Council that was originally slated for last Tuesday, March 7th, looked to be merely a formality given that EU Member States and the European Parliament had previously reached an agreement on a sales ban for new combustion engine vehicles starting in 2035 in October of last year. Instead, the formal decision was compromised by requests made primarily by the governments of Germany and Italy to exempt engines utilizing synthetic (e-)fuels from the legislation. Carbon dioxide and hydrogen are combined to create synthetic fuels, and the by-product of their burning can be drawn from the atmosphere. Only when the energy required to produce these fuels and their constituent parts is derived from renewable sources are they regarded as climate-neutral. 

Recently, nations including Poland, Bulgaria, and the Czech Republic joined Germany and Italy in opposing the proposed sales restriction. Poland's existing opposition to the rule and Bulgaria's decision to abstain could create a blocking minority in the Council. The prohibition would need to be approved by 15 of the EU's 27 member states, or at least 65 percent of the EU's total population. The EU's most populated nation is Germany, followed by Italy and Poland in that order. The vote was postponed because, without Germany's support, it seemed improbable that a majority representing 65% of EU citizens would be achieved. The Fit for 55 packages, which are a component of the European Green Deal, are part of a bigger effort to combat climate change. These packages aim to cut CO2 emissions from new vehicles and vans by 100% by 2035. The EU intends to attain climate neutrality by 2050 and cut its greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels. 

E-fuels, as a good alternative to decarbonize vehicles
Germany is not on board without an exemption for e-fuel Volker Wissing, the minister of transportation for Germany, warned Berlin last week that he would not support the sales ban. He claimed that the European Commission still had not produced a companion draft law outlining how automobiles and vans using climate-neutral fuels may continue to be registered in the EU after 2035. German Chancellor Olaf Scholz stated following a cabinet meeting that the federal government anticipated the European Commission to submit a recommendation on how much e-fuels may be used after 2035. 

From 2035, the restriction should not apply to newly registered combustion vehicles, according to German Finance Minister Christian Lindner. The choice about fleet limits and the potential for new registrations must be connected in a way that is both obvious and legally secure, according to Lindner. A car exporter like Germany should maintain the necessary competence in this field, he continued, as combustion engine technology will continue to be crucial around the world. He said that technology openness was a top objective for his party, the liberal FDP. 

Poland and Italy support the blockade. Giorgia Meloni, the prime minister of Italy, lauded the EU's decision to postpone voting on a plan to ban the sale of carbon-emitting gasoline and diesel vehicles starting in 2035 as "an Italian achievement."

The Italian government, according to her, "is clear: a fair, sustainable transition must be planned and carried out with care to prevent negative consequences in terms of production and employment," she said.

Meloni went on to claim that "although it is appropriate to work toward a CO2 emissions-free future as soon as feasible, states must be free to choose the strategy that best suits their needs. That entails keeping the door open for other clean technologies to electric [vehicles]." Italy emphasized that "by setting an emissions reduction target of 100% by 2035 and providing no incentive for the use of renewable fuels, the regulation is not in line with the principle of technological neutrality" in a letter sent to the representatives of the 27 EU Member States regarding the ban. 

In addition, the statement said "low-income people still possess combustion engine vehicles, which will be in use after 2035. The affordability of electric vehicles for these people will have a significant impact on their commercial success." Another Member State that has voiced opposition to the prohibition is Poland. During a seminar on photovoltaics in Brussels, the Polish Minister of Climate and Environment, Anna Moskwa, stated, "We have been from the beginning and we are invariably against the prohibition on the sale of combustion automobiles beyond 2035." (PAP).

"In the debates taking place behind closed doors, there are more and more doubtful voices. States realize that 2035 is not so far away when they awaken. Particularly those smaller nations, who will undoubtedly be inundated with foreign innovations. Their cultures are starting to grasp this truth and its implications for them", Moskwa said in a discussion with journalists, according to PAP. 

Lastly, Germany and Italy want the EU to submit a proposal enabling the sale of combustion engines powered by e-fuels after the 2035 as deadline. They propose to retain the option of such a solution open because there are numerous ways to decarbonize passenger cars.

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