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BERLIN — The most dangerous place in European politics right now is between a German and their car.
That’s been underlined yet again this week as Berlin threatens to derail the European Commission’s green transport agenda with a demand to make space for synthetic carbon-based fuels.
Europe’s largest economy, and a growing list of allied countries, are fighting the Commission’s proposal to ban the sale of new polluting cars and vans from 2035. German politicians are leaning on EU policymakers to include a loophole for synthetically produced gasoline called e-fuel — which produces emissions at the tailpipe — alongside electric and hydrogen-powered vehicles.
It’s an effort to secure a future for the internal combustion engine: the pride of German engineering and the national economy for more than a century. Switching to other technologies would unravel Germany’s competitive advantage built up over decades of refinement and expertise, putting hundreds of thousands of jobs on the line.
But the transition is seen as essential by the Commission and several other EU countries, whose main concern is combating climate change. They fear that keeping e-fuels in the mix will undermine the bloc’s effort to slash greenhouse gas emissions from transport and become climate neutral by 2050.
That raises six key questions.
1. What are e-fuels?
Think of them as the transport version of meat-free burgers — a way for motorists to replace polluting fuels with synthetic alternatives that are, in theory, carbon neutral.
E-fuels are made using CO2 captured from the atmosphere and hydrogen extracted with renewable electricity, and can be used in any conventional combustion engine. While they do release CO2 from the tailpipe, it’s just releasing what was captured in creating them, hence the claim to carbon neutrality.
But their ecological credentials are open to criticism. They require more clean energy to produce than what’s needed to power an equivalent electric vehicle fleet, placing a greater burden on electricity grids that are far from carbon-free. They also need to be transported from production sites — often outside Europe — to filling stations, which brings its own carbon footprint.
Plus, carbon offsetting won’t do anything to reduce the pollution and health effects caused by tailpipe emissions.
2. Where are they made?
For now, hardly anywhere. Porsche has invested in Chilean company Highly Innovative Fuels, which started production in December.
Closer to home, Norsk e-Fuel says it will start building a synthetic fuel facility in Norway this year, where it can scale up production to 25 million liters a year from 2026. But that will be a different fuel blend targeted at commercial aviation, not road transport.
Californian startup Prometheus Fuels is also working on the technology and has secured funding from BMW.
E-fuel promoters say that a strong demand signal and regulatory clarity will spur production. “If the market conditions and production rules are right, e-fuels can start to be produced in 2025 and steadily ramped-up to allow the complete replacement of conventional fuels in 2050,” industry lobby the eFuel Alliance says.
On the other side, green NGO Transport & Environment — which backs batteries — reckons that e-fuels could power just 2 percent of cars in the EU by 2035 even under the best-case scenario. That would make them little more than a novelty option for motorists who really can’t stand to lose out on the roar of a combustion engine.
3. Why does Germany love e-fuels?
It doesn’t, per se: Germany’s real love affair is with the combustion engine, its most important industry. Production of combustion-powered cars accounts for about 800,000 jobs.
Switching to electric vehicles will tear up existing supply chains and could cost a large fraction of those jobs, while exposing German carmakers to fierce competition from new rivals like China, which leads on EV technology.
That’s made e-fuels an attractive political play — especially for the liberal Free Democratic Party, the junior member of Germany’s three-party ruling coalition. Following a string of local election defeats, the party’s Porsche-driving leader Christian Lindner has put the issue at the heart of a play to revive the FDP’s electoral fortunes.
In terms of national politics, it’s a savvy move. A recent opinion poll finds that 68 percent of Germans don’t like the 2035 combustion engine car ban.
But the car industry, which is already investing in an electric future, is much less keen on the political instability created by Berlin’s gambit. It maintains its line that the EU should set broad aims and leave industry to decide which technologies to achieve them with.
“Mass electrification is a major part of the solution that we are all pushing towards, but it is no silver bullet,” Luca de Meo, the head of the ACEA car lobby and Renault’s CEO, said in a statement on Thursday. “The enemy is fossil-based energy, not a particular technology.”
And the Platform for Electromobility, an alliance of industries and NGOs, warns in an open letter to EU institutions that “recent political backpedalling” is blurring the signals to carmakers and industries involved in the EV transition.
4. So are e-fuels bad?
While they aren’t as green as batteries and hydrogen, e-fuels represent a possible solution of what to do about the 287 million combustion-powered cars forecast to still be driving on European roads after 2035. They also offer a way to clean up shipping and aviation, which are much harder to electrify due to the weight of the batteries that would be required.
Industry says it needs a clear regulatory signal before investing the billions needed to produce e-fuels.
But green groups like T&E call synthetic gasoline a “Trojan horse,” noting that it takes about four times as much renewable energy to power a combustion-engine car using e-fuels as an equivalent electric vehicle. It also worries that the hydrogen used to make e-fuels can also be made by breaking apart natural gas instead of with green electricity — dramatically boosting its carbon footprint.
E-fuels were discussed as the EU haggled over the 2035 legislation, but they were rejected by the European Parliament. Under German pressure, the Council did include a “recital” — Brussels speak for a non-binding resolution — on e-fuels in the legislation.
5. What’s the political impact of Germany’s e-fuel dalliance?
Germany and its allies — Italy, Poland, the Czech Republic and Bulgaria — are blocking final approval of the EU’s 2035 measure until the Commission puts forward its e-fuel ideas. Together, the countries carry enough wait to block the text from entering into law.
That’s an almost unprecedented step but Germany has gone to the wall for cars before. In 2013, then-Chancellor Angela Merkel personally intervened to water down an effort to improve fuel efficiency of cars.
Transport ministers from a wider range of engine-friendly countries will meet Monday to discuss vehicle emissions regulations — a sign that Berlin is attracting other capitals with qualms about the 2035 legislation.
But Germany’s stance is riling countries that back the measure. France’s Transport Minister Clément Beaune said Wednesday that it would be an “environmental and industrial failure” to walk back on the 2035 target.
Spain, Europe’s fourth biggest carmaking country, has a similar take: “I think that we should find a way forward that does not undermine the whole substantial puzzle of Fit for 55,” Teresa Ribera, minister for the ecological transition, said at a POLITICO event referring to a package of EU green laws.
6. Where’s the landing zone?
This is Brussels, so any solution is likely to be a messy compromise.
One option being looked at is for the Commission’s legal advisers to present a declaration “setting out very clearly how it will follow up on the e-fuels recital,” said an EU official briefed on thinking inside the Berlaymont. “What’s impossible is reopening the text or renegotiating.”
That could be part of a broader rethink that tweaks the EU’s methodology to assess total emissions associated with road transport — something the Commission is due to review later this decade. E-fuels could then be allowed if it could be shown that their CO2 tailpipe emissions were balanced with the CO2 sucked from the atmosphere when producing them.
If Germany doesn’t swallow that fudge, then the 2035 legislation will likely go in the deep freeze until there is political will to toy again with Germany’s love affair with cars.
