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Under German pressure, the European Commission has drafted a plan allowing combustion engine vehicles to be sold after 2035 if they run only on climate-neutral e-fuels. The proposal suggests creating a new EU vehicle category for carbon-neutral fuel cars, with technology preventing non-neutral fuel use. E-fuels, like e-methane, e-kerosene, and e-methanol, are produced from renewable or decarbonized electricity and play a significant role in decarbonization strategies. Germany’s Transport Ministry wants the EU to permit new e-fuel car sales post-2035, while critics argue e-fuels are inefficient and expensive. The final decision is anticipated by Thursday’s EU summit.

The European Commission’s draft proposal has the potential to revolutionize the automotive industry, allowing internal combustion engine (ICE) vehicles to coexist with electric vehicles (EVs) while still meeting climate goals. The proposal comes in response to Germany’s objections to the EU’s 2035 ban on new petrol and diesel cars.

Advantages of e-fuels

E-fuels offer several benefits, including reduced harmful emissions and a lower carbon footprint compared to oil-based fuels. They can be used in existing ICE vehicles, eliminating the need for new infrastructure and easing the transition to carbon-neutral transportation. E-fuels also have applications in heavy mobility sectors like maritime and air transport, where electrification alone cannot achieve decarbonization.

Germany, Europe’s largest car producer with 820,000 jobs to protect and investments in the synthetic fuels industry, has a vested interest in e-fuels. German Transport Minister Volker Wissing argues that “the internal combustion engine itself is not the problem; the fossil fuels it runs on are.”

Disadvantages of e-fuels

Despite their potential benefits, e-fuels have drawbacks. They are not yet produced at scale, with a study by the Potsdam Institute for Climate Research showing that all planned e-fuel projects worldwide would only cover 10% of Germany’s demand for e-fuel use in aviation, shipping, and chemicals in the next few years. E-fuels are also less efficient and more expensive than other alternatives, according to Michael Bloss, MEP and climate policy spokesperson for Germany’s Green party.

The European Commission’s draft proposal also requires vehicles to use technology that prevents non-neutral fuels from being used, which could force automakers to develop new engines. This added complexity and cost might hinder the widespread adoption of e-fuels.

Industry and political reactions

The e-fuel proposal has sparked debate among EU countries, with some concerned about market disruptions and investor uncertainty. Spain’s Minister for Ecological Transition, Teresa Ribera, warns that last-minute changes could send confusing messages and disrupt procedural rules.

Germany’s insistence on e-fuels has also been seen as an attempt to appease its domestic coalition government, with Ribera stating, “They may have a domestic political difficulty, but now they have exported their domestic political difficulty to the whole European Union.”

While the future of e-fuels remains uncertain, the outcome of Thursday’s EU summit may determine whether they become a viable alternative to electric vehicles or remain a contentious topic in the fight against climate change.