European New ICE Vehicle Ban In 2035 Stumbles, But Has It Crashed?

The European Union agreed to end the sale of new internal combustion engine (ICE) cars and SUVs by 2035, and formal approval was scheduled for March 7, but the signing has been postponed because Germany is unhappy. Environmental groups are furious.

The delay came out of the blue. It has thrown the European auto industry into confusion.

The problem reflects dissent in Germany’s governing coalition. The conservative Free Democratic Party (FDP) wants so-called synthetic fuels or e-fuels to be allowed after 2035. These fuels are produced using electricity from renewable hydrogen and other gases and are called “carbon neutral” by supporters and would prolong the life of combustion technology. Some automakers say this can be an alternative to electric cars because they are carbon dioxide (CO2) emission-free. Brussels-based environmental lobby group Transport & Environment begs to differ.

German unions also want the ICE ban mitigated. They say hundreds of thousands of jobs in Germany will be at risk if the ban goes ahead. Italy and Poland are also opposed.

The agreement was designed to make sure only electric sedans and SUVs could be sold after 2035, and the EU’s version was clear-cut. Hybrids and plug-in hybrid electric vehicles (PHEVs) were banned. Hybrids combine an ICE with a battery and have limited battery-only capability. PHEVs have bigger batteries with up to 50 miles of battery-only use.

To underline the severity of the EU plan, even the California Air Resources Board (CARB), known for its aggressive attitude in curbing CO2 and whose rules may be accepted by some U.S. states, has also banned the sale of new ICE vehicles by 2035. But it has given PHEVs a limited dispensation because it felt poorer people in rural locations might find BEVs too expensive or impractical. Britain has banned the sale of new ICE vehicles by 2030, but so far hasn’t decided the fate of hybrids.

It’s not clear whether this is a short-lived spat in the German coalition or a more serious roadblock to the arrangement.

T&E said if the deal is blocked it would derail a key part of the European Green Deal – the EU plan to become carbon neutral in 2050. It is not happy.

“The FDP are turning Europe’s engine phase-out into a battle for the soul of Germany’s governing coalition. By blocking the most progressive climate legislation in the world, the Liberals (FDP) risk not only the breakup of the coalition but Germany’s credibility on the world stage,” said Julia Poliscanova, senior director for vehicles at T&E.

“The FDP’s cry for e-fuels is about domestic political point scoring after a series of election defeats. Championing the internal combustion engine might play well to their base, but it will give the advantage to the U.S. and China, which are threatening to overtake Europe with massive investments in electric cars and batteries,” Poliscanova said.

According to T&E, synthetic fuels are a far less environmentally friendly solution for cars than battery-powered electric cars. A car running on pure e-fuels would emit significantly more CO2 over its life cycle than electric cars.

The auto industry awaits a decision from German Chancellor Olaf Scholz. The coalition comprises Scholz’s Social Democrats (SDP), the Green Party and the FDP.