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Ban on the combustion engine in 2035? - Safeguarding electromobility and e-fuels in a technology-open approach

As part of its Fit-for-55-package, the EU Commission has presented a revision of the CO2 fleet regulation. In particular, it provides for a 100 percent reduction target for CO2 emissions from passenger cars and light commercial vehicles by 2035. The proposal had already been endorsed by the EU Parliament at the beginning of June. With its vote, the EU Council has reopened the discussion on a technology-open regulatory approach for electromobility and internal combustion vehicles with e-fuels. However, the implementation is completely open.

The goal of the regulation is to increase the speed in climate protection regarding the transport portfolio. According to the EU Commission and the EU Parliament, this is to be achieved by a de facto ban on the registration of new passenger cars and light commercial vehicles with internal combustion engines in the European Union from 2035. From the industry's point of view, this would be a momentous decision against innovation, openness to technology and ultimately against Europe as a business location - and without any sustainable effect on more climate protection. The EU Commission must clarify as soon as possible how it interprets the unclear wording of the EU Council on the use of e-fuels. The technology-open use of electromobility and e-fuels must now also gain acceptance in the EU Parliament and the EU Commission.

At the end of June – under the French Council Presidency, the EU environment ministers spoke out in favour of a supposedly technology-open approach. The Brussels institutions are sticking to their common goal of achieving a 100 percent reduction in CO2 emissions from newly registered passenger cars and light commercial vehicles by 2035. Differing from the EU Commission and Parliament, the EU Council also wants to allow the use of vehicles with internal combustion engines that run exclusively on CO2-neutral fuels - so-called e-fuels. The Council of Ministers has called on the EU Commission to submit a proposal on this use. The concrete implementation, a binding link with the CO2 fleet regulation, the scope of the vehicles included and the further timetable in the trilogue procedure are still completely unclear.

Do not limit the future scope for solutions by imposing a technology

At present, the industry must therefore assume that politicians will continue to prescribe a de facto end to internal combustion engines for the majority of new registrations of passenger cars and light commercial vehicles. In this case, the technology path of electromobility would be unilaterally defined by law. This would be a highly problematic decision and the announced technology-open approach by the Council of Ministers would be only a supposed victory for technological openness. The transformation process of the entire automotive value chain in Europe is already in full swing in the direction of electromobility. However, politicians are interfering massively with this future process through their decisions. At the same time, it is failing to do its homework. Key prerequisites for the success of electromobility have not yet been clarified. The most important example: there is a lack of real ambition for a rapid and comprehensive development of charging infrastructure for electric vehicles.

It is the task of politics to provide the right framework conditions for innovation and technology ramp-up. Politicians are mistaken if they think they can "regulate" innovations for climate protection by prescribing technology solutions. At the present time, it is impossible to predict with certainty what technological solutions will exist in 2035 and beyond. Current challenges such as further digitalisation and the availability of raw materials, semiconductors and renewable energies make it clear that a solution space for alternative drives and fuels in addition to direct electrification can also make sense in the future. Therefore, the Council compromise proposed by Germany to use e-fuels outside of fleet regulation could prove to be nothing more than a political sham. Without a binding anchoring of e-fuels in the CO2 fleet regulation, there will be no decisive additional impetus for the urgently needed ramp-up of a European hydrogen and PtX economy.

Revision of CO2 fleet regulation poses enormous challenges for industry

A one-sided and accelerated transformation focussed on electromobility threatens considerable job losses for the people employed, especially in smaller and medium-sized companies in the European supplier industry. The EU's decision therefore poses very high challenges for German and European industry. A complete analysis of social and economic consequences is omitted. This also raises further questions regarding the renewal of vehicle fleets in member states with lower average incomes. This could come to a standstill: in these countries, it is mainly second-hand cars from the larger industrialised countries. But neither new nor used electric cars can access a nationwide charging network in countries like Bulgaria, Hungary, Poland or Malta and Greece in the foreseeable future. Thus, the prospective Brussels decision to phase out the internal combustion engine is also a decision against customer interests and a social balance.

EU institutions must now do their homework

Regardless of the further course of the discussions on a de facto ban on internal combustion engines or the future use of e-fuels: the challenges of climate protection no longer allow politicians to hesitate. If they prescribe technologies and extremely ambitious fleet limits, the framework conditions must be right. This has been lacking so far. Politicians are therefore called upon to do their homework: They must quickly clarify the open questions for the use of e-fuels in road traffic. The ramp-up of electromobility must be secured. This means, above all, pushing ahead with the development of the charging infrastructure. In addition, there needs to be security in terms of raw materials, semiconductors and renewable energy and, as a flanking measure, a pricing on carbon dioxide. Furthermore, politics must support the necessary transformation path, especially for small and medium-sized enterprises.