A behind-the-scenes tussle between Germany and the EU over plans to phase out traditional cars turned into a public war of words on Thursday.
BY HANS VON DER BURCHARD, JOSHUA POSANER AND GREGORIO SORGI
MARCH 23, 2023
Germany's Chancellor Olaf Scholz stood firm, saying The EU Commission must deliver on a “promise made long ago” | Kenzo Tribouillard/AFP via Getty Images
BRUSSELS — Olaf Scholz arrived Thursday in Brussels proclaiming the EU had made a “promise” and must keep it.
Hours later, the EU clapped back, essentially saying the German chancellor was lying.
By the end of the day, Germany had rejected an offer to compromise while seeking to blame the EU.
That was how, in one day, Germany’s behind-the-scenes tussle over the EU’s plan to ban traditional cars became a public war of words and escalated to new levels — overshadowing an EU leaders' summit in the process.
The gathering was meant to focus on many things — the economy, trade, Ukraine — but not cars. Nevertheless, the future of the traditional combustion engine car dominated the conversation on day 1. Leaders were pestered about it on the way in. And Germany and the European Commission were quickly trading barbs.
The fight, in a nutshell, is this: Germany wants to keep selling some traditional combustion-engine vehicles after 2035, the date the EU has set for their extermination, as long as those cars run on synthetic fuels, or e-fuels — which are, in theory, carbon neutral.
The EU, however, has essentially already finalized its plans — which have widespread buy-in from across the bloc — and isn’t keen to make last-minute changes.
Scholz stood firm Thursday morning. The European Commission, he said, must deliver on a “promise made long ago” to examine the synthetic fuels loophole.
The EU’s executive struck back swiftly: The Commission would not make a bespoke tweak to otherwise settled legislation just to pacify the Germans before it gave the final rubber stamp — it was "never in question," said one official, speaking on the condition of anonymity. In other words: There was no "promise," according to the Commission.
The clash of words came just as the German government rejected the Commission's latest offer to find a compromise. The fresh exchange of letters had raised hopes that a solution may be in the works — but now a roadblock appears likely to continue.
"The negotiations are progressing," Commission President Ursula von der Leyen said after leaders broke up for the night. "There is the will on both sides to resolve this topic."
But, she added pointedly: "Time is of the essence in this case as this file is an important pillar" of the EU's climate plans.
Grumbling at Germany
Germany, Europe's largest carmaker and the cradle of the combustion engine, earlier this month held up the car law — just as it was set to take effect — in order to force through an e-fuels loophole. That move has called into question the EU’s ability to meet its broader climate targets.
“If one member state can do it, what will stop the next?” Latvia's Prime Minister Krišjānis Kariņš said. “This is not a direction we need to go in. The entire architecture of decision-making would fall apart if we all did that.”
The European Parliament is also watching closely, given it had twice rejected e-fuels as a viable inclusion.
“We cannot go back on deals because this is ultimately about trust between co-legislators and the credibility of the legislative process,” the Parliament's President Roberta Metsola said on the sidelines of the summit, days after sending a letter to EU capitals arguing that the 2035 target should stand.
Yet while many EU leaders similarly grumbled and eye-rolled at Germany’s behavior on Thursday, others showed Berlin was not alone.
Italy’s Prime Minister Giorgia Meloni warned that banning the sale of combustion-engine cars by 2035 would leave the EU entirely reliant on electric vehicles — a technology China currently dominates as a major producer of battery cells worldwide.
“There are some technologies in which Italy and Europe have the upper edge,” Meloni said of the auto industry. “Tying ourselves to technologies where foreign countries have the upper edge does not favor the competitiveness of our system.”
Some even said they wanted to bring up the topic directly during the high-level meeting.
While the issue wasn't on the formal agenda for leaders during their meeting, it did come up during discussions.
The leaders of major car-making countries, including the Czech Republic and Slovakia, said they were planning to raise auto emissions during the summit. That would widen the cars debate beyond the combustion engine to also include a nascent — and controversial — EU plan to broadly reduce all toxic exhaust pollutants, dubbed Euro 7.
“There’s a lot of disinformation about combustion engines,” said Eduard Heger, Slovakia’s prime minister, adding that he “definitely” wants to talk to Scholz about automotive rules. “It is the Euro 7 that is the problematic norm. I want to use this opportunity to talk to my partners on the Euro 7 problem.”
That threatens to further derail the conversation over the 2035 combustion engine ban — a completed proposal — by twinning it with Euro 7, which is still in the early stages of development.
Czech Prime Minister Petr Fiala said the plan was to create a “strong” group of countries to push for Euro 7 changes, starting at this week’s summit. Prague is also aligned with the German government in wanting to tweak the 2035 plans.
One major factor in how this all plays out will be France. In advance of the summit, French President Emmanuel Macron's team had promised to "fight" to maintain the agreement on a fixed zero-emissions mandate.
But Macron himself was silent on the subject throughout Thursday. He arrived late to the summit and swerved the media on his way in.
As the day waned, there was a flurry of activity over whether France had softened and come around on Germany's position. The Elysée quickly stamped that out.
“We have always said that we were looking for a solution, but we’ll not give in on the 2035 date,” said one Elysée official.
Clea Caulcutt contributed reporting.