Germany faces EU backlash over U-turn on phasing out combustion engine

<span>Photograph: Pier Marco Tacca/Getty Images</span>
Photograph: Pier Marco Tacca/Getty Images

Germany is facing a growing backlash inside the EU over its U-turn on a law to phase out the combustion engine in new cars by 2035, despite signs of an end to the standoff with Brussels.

The row comes amid growing concerns over France’s push to include nuclear across a swathe of laws on green technologies, a further signal of tensions over the EU green deal, landmark proposals to tackle the climate crisis.

Speaking to reporters on Friday, the German chancellor, Olaf Scholz, said “we will find an agreement” amid signs Berlin was edging towards a compromise with the European Commission over the role of e-fuels in a law to ban new petrol and diesel cars from 2035. But his transport minister, Volker Wissing, a senior member of the pro-business Free Democratic party, which has led Germany’s last-minute opposition, said there were still questions to be answered. “We are not fully in agreement yet,” Wissing said.

The squabble overshadowed an EU summit in Brussels dedicated to the war on Ukraine, and Europe’s economy and banking system, although officials said there were no formal talks on the dispute.

Yet on the sidelines of the summit, some EU leaders could barely hide their irritation with Berlin’s decision to renege on a done deal after months of painstaking negotiations.

EU ministers and MEPs struck an agreement to end the sale of new petrol and diesel cars by 2035 last October, a law hailed as a major step on the way to climate neutrality. Days before the text was going to be rubber-stamped earlier this month, Germany announced it would not proceed unless there was a place for climate-neutral e-fuels, in addition to battery-powered electric vehicles.

Latvia’s prime minister, Krisjāniš Kariņš, described Germany’s behaviour as “difficult” and “troubling”. He said: “If one member state can do it, what will stop the next … The entire architecture and [EU] decision-making would fall apart if we all did that.”

In an implicit rebuke from a close ally, the Belgian prime minister, Alexander De Croo, said there could be no hesitation in going for the electrification of the transport system. “We cannot hesitate now, ask questions and try to change the strategy.”

A senior European diplomat told the Guardian it was just one of many “erratic” decisions from Germany under Scholz’s three-party coalition, citing Berlin’s position on a law on the rights of gig-economy workers that contributed to failure to reach an EU-wide agreement last year. “It basically has to do with the liberal [FDP] party going rogue,” the person said.

EU officials blame Scholz and Green party members of the government for failing to take a more forceful stance to solve the combustion engine dispute inside the three-way coalition.

Germany is understood to have largely accepted a compromise that would allow combustion engines running on e-fuels, but is angling to make the agreement legally binding. The Commission opposes this move, which would require reopening the text agreed six months ago.

Pascal Canfin, the French centrist who chairs the European parliament’s environment committee, tweeted that reopening the deal was a red line and called on Germany to “stay a reliable country”.

The European Commission president, Ursula von der Leyen, said she was sure “we will find a solution” but that “time is of the essence”.

The FDP’s change of heart on the combustion engine phase-out speaks to growing concerns in the German car industry, especially among companies that have specialised in manufacturing parts unique to combustion engines, such as exhaust pipes. While large German carmakers have already committed to pivoting to battery-powered vehicles, many of these auto parts manufacturers worry that the EU’s plans in its original form would render their most profitable products in Europe redundant.

“We are of the conviction that the best, most climate-friendly and most efficient combustion engines should be continued to be built by those who have perfected them – by us,” said a spokesperson for the German Association of the Automobile Industry (VDA).

E-fuels, which can be made from captured carbon dioxide and hydrogen, or the chemical or thermal treatment of biofuels or biomass, are not yet commercially available. The Potsdam Institute for Climate Impact Research said this week they were likely to remain scarce. It estimates that by 2035 all global e-fuel projects would cover only 10% of Germany’s needs.

Some EU diplomats have likened the German insistence on e-fuels as akin to “legislating for magic”.

The row is a sign of growing tensions about the EU’s green deal, a landmark set of laws intended to ensure Europe achieves net zero carbon emissions by 2050.

France is at odds with Germany, Austria, Luxembourg and other countries over its push for nuclear across a swathe of laws to promote green technology or renewable energy.

Paris has been described as making an “aggressive” effort to have nuclear considered akin to renewables in one proposal on gases, after successful efforts to include nuclear in other draft laws, such as an act to boost Europe’s net zero industries.

One European diplomat said the French proposal was akin to opening Pandora’s box, because it would mean low-carbon gases could be counted towards renewable energy targets, adding: “It’s a great ​way ​to dilute your ambition and decarbonisation path.”

The senior diplomat described the French demands on the EU’s draft gas laws as “impossible” and “outrageous”, adding: “Any attempt by our guys to say listen renewable is not low carbon they won’t accept it they don’t even listen. They just come back with the same proposal.”

“Germany is chaotic and France is aggressive,” the person added. “This is the German-French motor of the EU and it is really concerning.”

The French president, Emmanuel Macron, told reporters on Friday that France was “investing massively” in renewable energy, but that in order to achieve the goals of decarbonisation and energy security “we know that renewables will not be enough and nuclear will constitute a necessary part [of the energy mix] at European level”.