EU Regulation for CO2 Emissions in 2035: The De facto Restrictions
The European Union (EU) is expected to confirm a deal on the ban of combustion engines and the promotion of e-fuels on Tuesday. This agreement, the result of a compromise between the positions of Frans Timmermans and Volker Wissing, could be considered a win for both the EU and Germany.
The deal provides planning security for Original Equipment Manufacturers (OEMs) to transition to a cleaner future, while extending the use of Internal Combustion Engine (ICE) technology and avoiding a full-blown prohibition of fossil fuels. The e-fuel used will be a diluted blend, referred to as EL20 (20% mix), which will satisfy many vehicles already on the road, rather than new ICE vehicles.
New ICE vehicles will have to use more expensive 100% E-fuel, limiting its use to a small number of drivers. The price of 100% E-fuel may not be accessible to 99% of consumers, as ICE technology is expected to be at least a decade old by 2035 with little new investment from European OEMs. ICE models powered exclusively by E-fuel will be the only models permitted from 2035; all others will be banned.
The trialogue discussions between the Council, Parliament, and Commission of the European Union's 27-member state community have reached a near-conclusion. However, the slow pace of final bureaucracy in Germany has been highlighted, with German Autobahns known for their high speed limits. Germany and its FDP minority coalition partner, controlling the Transport Ministry under Volker Wissing, have thrown a last-minute obstacle into the process.
Meanwhile, the Vice-President of the European Commission, Franz Timmermans, may have a deal, but it remains to be seen if it is final. Timmermans has caused months of delays in sealing the deal, a fact that has not gone unnoticed.
In a separate development, a study investigates whether Chinese OEMs pose a threat to established European OEMs and what the outlook looks like. The full study, published each month, now features an in-depth look at the Chinese OEMs and their European expansion. The periphery has influenced this obstacle, suggesting a potential winner is not clear.
As the EU moves closer to finalizing this deal, it's clear that the future of transportation in Europe is set to change dramatically. Whether this change will be a smooth transition or a bumpy ride remains to be seen.
