27 Mar 23

European Commission to allow sale of ICE vehicles after 2035, despite fleet opposition

Despite leading businesses, including AnPost, AstraZeneca, IKEA, Pfizer, SAP Labs, Tesco and Unilever, as well as Volvo Cars and Ford of Europe, calling on the European Commission to stand firm in its commitment to ban the sale of new petrol and diesel cars and vans from 2035, the Commission has yielded to pressure from Germany and will now allow the sale of ICE vehicles powered by e-fuels after 2035.

They were responding to doubts over Europe’s ability to meet its targets to phase out the sale of new vehicles powered by internal combustion engines before the challenging deadlines set by the continent’s policy makers. Governments, vehicle manufacturers and tier one suppliers are either delaying the ICE ban or expressing concern that they can scale up production of EVs within the ambitious timelines to which fleets and the wider automotive industry are working.

The issue came to a head when European Union ambassadors decided to postpone a vote that would have ratified an EU-wide ban on the sale of new internal combustion engine vehicles from 2035. Major fleets have been pushing for an even earlier transition to battery electric cars and vans, setting themselves a deadline of 2030, while Norway is working towards a nationwide deadline of 2025. The EU selected 2035 as its cut-off because the average life of a vehicle is 15 years, and Europe’s Green Deal is aiming for carbon neutrality by mid-century.

Fleets commit to 2035

A total of 47 leading companies signed the letter, which said: "The EU businesses need clarity and high ambition in legislation to support their longer-term plans to switch to electric vehicles. First mover companies have already significantly invested in zero emission vehicles and should be rewarded for taking the inherent risks to decarbonise their fleet. It would be a very negative signal to reverse the political agreement reached last year."

They warned that a failure to transition all new cars and vans to zero emissions by 2035 would see Europe fail in its 2050 target for carbon neutrality.

OEM reaction

Martin Sander, General Manager, Ford Model e Europe, said: “Ford is ready to go all-in electric. The ongoing debate only creates uncertainty among consumers and is distracting from our joint efforts to tackle the climate crisis.”

And Jim Rowan, CEO, Volvo Cars, said now is not the time for policy makers to put domestic political interests ahead of the health and welfare of the planet and EU citizens.

“Now is not the time for backtracking and blocking of science-based climate targets for our industry. Now is the time for strong, decisive and progressive policy and leadership," he said. “Volvo Cars is committed to being a fully electric car company by 2030 on our way to climate neutrality by 2040. We are aware of our obligation to help protect the planet. We call on EU Governments to show that they are too.”

2035 ban

The European Union's Permanent Representatives Committee (Coreper) had been expected to wave through the 2035 deadline, given that it had already secured the support of the European Parliament and the EU Council, but Germany objected. The continent’s largest vehicle producer insisted that the new law should include a provision for e-fuels, which are synthetic liquid fuels used to power internal combustion engines in the same way as petrol or diesel.

Volker Wissing, Germany’s transport minister, tweeted: “The internal combustion engine itself is not the problem, the fossil fuels it runs on are. Climate neutrality is the goal and at the same time an opportunity for new technologies. We have to be open to different solutions.”

He added in an interview with Bild that: “In Germany, the coalition has just decided that e-fuels in their pure form can be approved and that vehicles with combustion engines can be operated in a climate-neutral manner.”

Find out everything you want to know about e-fuels here.

The European Commission has yielded to this pressure, with Frans Timmermans, head of EU climate policy, tweeting: "We have found an agreement with Germany on the future use of efuels in cars."

Wissing replied: "The way is clear: Europe remains technology-neutral. Vehicles with combustion engines can also be newly registered after 2035 if they only fill up with CO2-neutral fuels.We are securing opportunities for Europe by giving us important options for climate-neutral and affordable mobility."

Environmentalist opposition

The concession has been sharply criticised by environmentalists, who said the single most important law to tackle transport emissions is in jeopardy. They argue that scarce e-fuels should be used to power existing petrol cars after 2035, and that the Commission should not add to e-fuel demand by allowing the sale of new vehicles powered by e-fuels. Transport & Environment claimed that if e-petrol is used in new cars, then vehicles already on the road will burn an additional 135 billion litres of fossil petrol and emit an extra 320 MtCO2e by 2050, rather than decarbonising by using the available e-petrol.

Alex Keynes, clean vehicles manager at T&E, said: “By undermining the clarity of the engine phase-out for the sake of an expensive and polluting fuel, Chancellor Scholz is risking Europe’s green transition and the future of its car industry. The higher cost of e-fuels will mean that only the wealthy could afford them while everyone else could be pushed into getting around the rules and using fossil petrol instead. Motorists and the climate will be the losers.”

Fleet sustainability will be the principal focus of the Global Fleet Conference in May - register here.

E-fuels, also known as synthetic fuels, are not derived from oil or gas, but created from a chemical process based on hydrogen, and produced using renewable energy. Nonetheless, a study last year found that cars running on e-fuels emit more CO2 over their lifespan than battery electric models.

Technology openness

The European Automobile Manufacturers’ Association (ACEA) said it supports the EU’s climate targets, but added that ‘technology openness’ is essential.

Luca de Meo, ACEA President, said: “Mass electrification is a major part of the solution that we are all pushing towards, but it is no silver bullet. The enemy is fossil-based energy, not a particular technology.”

E-fuels might, for example, provide a lower emission answer for the existing fleet of vehicles on the road.

EV infrastructure

ACEA also reiterated its calls for European policy makers to build a robust framework to support mass electrification, including access to the necessary raw materials, and a dense network of charging infrastructure, with progress monitored by a clear set of KPIs.

OEMs pessimistic about EV production

Vehicle manufacturers and their component suppliers are pessimistic about their ability to shift to 100% electric vehicle production by 2030-2040, according to a new survey of almost 600 automotive executives by ABB Robotics, part of ABB. Only 39% thought the industry could meet this deadline, while a further 41% thought that complete electrification is possible, but over a longer timescale, with constraints due to a lack of charging infrastructure, high battery and electric vehicle prices, slow technological advances in EV range & charging performance, constrained upstream battery supply chain, and consumer resistance to EVs.

“Regionally, less than 10% of Europeans believe the targets are realistic,” said the ABB survey.

Images: Shutterstock

Authored by: Jonathan Manning