Fears for German car industry threaten 2035 petrol car ban

Germany may not support a proposed Europe-wide ban on petrol and diesel cars by 2035 because of concerns about job losses in its flagship motor industry.

The proposal has exposed a rift within Chancellor Olaf Scholz’s three-party coalition, with senior liberal figures saying they cannot support a measure favoured by the Green party.

The European Parliament this week voted in favour of banning new combustion engines by 2035, but it cannot become law until it is approved by a supermajority of EU nations, which would be hard to attain without Germany.

Christian Lindner, the finance minister and liberal leader who opposes the ban, said Germany should be open to cleaner fuels for combustion engines and that manufacturers should still be able to export old-style cars abroad.

“The combustion engine will still be used for some time around the world. In the interests of thousands of jobs, we can’t cut ourselves off,” said Mr Lindner, whose Free Democrats have long argued for green innovation instead of regulation.

Junior minister Oliver Luksic said German industry would cede that market to China, while his party colleague Christian Duerr, the liberals' parliamentary leader, said the combustion engine ban would “throw us backwards” by closing off the option of using climate-friendly e-fuels.

E-fuels are made from water and recaptured carbon and are billed as a low-emission alternative to petrol or diesel. But sceptics doubt their effectiveness because they are expensive to produce.

EU climate chief Franks Timmermans at the parliamentary debate this week that said such fuels would never be available in sufficient quantities, would end up being far more expensive than electric cars and still cause air pollution.

The vote by members of the European Parliament (MEPs) was heralded as a breakthrough amid an otherwise unproductive series of votes on EU climate change proposals, after a deal on carbon pricing collapsed in acrimony in the parliament.

“The end of the combustion engine is coming … good news for the climate and an opportunity for efficient, futureproof technology in Europe and Germany,” said Germany's Green MP and transport committee member Matthias Gastel.

But some environmentalists say it does not go far enough because cars only hitting the road in 2035 will still be polluting away well into the 2040s, too close to Europe’s mid-century deadline for carbon neutrality.

“2035 is 10 years too late,” said Luisa Neubauer, the face of the youth-led Fridays for Future movement in Germany.

The Greens had called for a 2030 deadline before last year’s election in Germany, while Mr Lindner’s liberals opposed a blanket ban.

The coalition deal that put Mr Scholz in power has avoided taking a direct position, but the parties will have to find one before the EU measure is put to the 27 member governments in a vote.

Despite concerns for the car industry, some of Germany’s big-name manufacturers have said they could go along with a 2035 date after spending the last few years gradually making the switch to electric.

Volkswagen said the deadline was “ambitious but achievable” and that electric cars were the only realistic alternative, in a statement released to German media.

Mercedes-Benz said it welcomed the European Parliament vote in principle and said it would be “ready to go all-electric” by 2030 where market conditions allow.

Production of electric cars in Germany rose by 86 per cent in 2021, while combustion engines were down 23 per cent.

However, an industry association said Europe’s charging infrastructure was not yet up to scratch to allow for a rapid switch to electric.