EU delays combustion engine ban vote amid German demur

BLOOMBERG

The European Union (EU) delayed a key vote on an effective ban on combustion-engine cars after Germany unexpectedly voiced last-minute objections amid concerns about how the bloc’s green plans will affect industry.
EU and German officials are in talks over how to reach a compromise over allowing the use of e-fuels in new cars after 2035, and there were signs from Berlin that a deal can still be reached that would allow the phase-out to go ahead.
European Commission President Ursula von der Leyen is set to meet German Chancellor Olaf Scholz on the sidelines of a German cabinet meeting, when the topic will likely be discussed.
“It is contradictory when the EU Commission calls for high climate protection targets on the one hand, but on the other hand makes it more difficult to achieve these targets through overambitious regulation,” German Transport Minister Volker Wissing told lawmakers in the lower house of parliament in Berlin, adding that it’s up to the EU’s executive arm to come up with a viable solution.
EU ministers were scheduled to vote in what was supposed to be a routine approval of a deal the bloc clinched last year to effectively ban new vehicles that run on fossil fuels beginning in 2035.
But Daniel Holmberg, a spokesman for Sweden, which holds the EU’s rotating presidency, confirmed the vote delay on Twitter and said diplomats will return to the issue “in due time.”
The delay reflects concern that Germany would have abstained — a move that could derail the bloc’s green plans, according to people familiar with the matter.
Some German officials have signalled that they think a deal is achievable that will preserve the broader ban. “If the commission has a credible stance in conversations with the ministers and the German government, I’m optimistic that a solution will be found,” Sven Giegold, state secretary at Germany’s Federal Ministry for Economic Affairs and Climate Action, said, adding that the negotiations are difficult.
Germany is seeking assurances that the European Commission, the EU’s executive arm, will put forward provisions on how so-called e-fuels can be used in combustion engine cars after the 2035 cut-off.
While the bloc’s executive branch is obliged to come up with a proposal after consulting with stakeholders, there is no set timeline for such a move, beyond a general review in 2026.
The last-minute hiccup is highly unusual in EU lawmaking, given the deal between the EU’s 27 member states and parliament was struck in October last year and the upcoming vote is usually a formality.
The EU is scrambling to come up with a solution that would assuage Germany, meaning a compromise is still likely, even if the final approval is delayed.
The problem is that designing a carve-out for e-fuels, which are produced from renewable electricity, is likely to be technical, and there isn’t much time to reach a deal before EU parliamentary elections next year.

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