German carmakers seek e-fuel help as EU tightens climate goals

A new carbon reduction target proposed by the European Commission has caught the German car industry on a back foot.The commission proposed a cut in greenhouse gas emissions of at least 55% compared with 1990 levels.
By : Bloomberg
| Updated on: 24 Sep 2020, 19:30 PM
Newly manufactured cars are seen at a port in Dalian, Liaoning province, China. (File photo) (REUTERS)
Newly manufactured cars are seen at a port in Dalian, Liaoning province, China. (File photo) (REUTERS)
Newly manufactured cars are seen at a port in Dalian, Liaoning province, China. (File photo) (REUTERS)
Newly manufactured cars are seen at a port in Dalian, Liaoning province, China. (File photo)

Germany’s car industry is looking for assurances that a plan to make deeper cuts in carbon pollution in the European Union will leave a loophole for the combustion engine.

A new carbon reduction target proposed by the European Commission has caught the German car industry on a back foot, heaping more pressure on a key industry that’s already struggling with the coronavirus pandemic, according to the VDA car lobby and Robert Bosch GmbH, Germany’s largest automotive parts maker.

The EC proposed a cut in greenhouse gas emissions of at least 55% compared with 1990 levels, deeper than the current 40% target. That may force carmakers to slash emissions for new vehicles in half by 2030 compared with average output in 2021.

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(Also read: Banning diesel, petrol cars by 2030 would meet UK climate goal)

The prospect reinforced carmakers’ resolve to keep open a lifeline for combustion engines that can be fed emissions-reducing synthetic or E-fuels, said VDA President Hildegard Mueller.

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The EU’s proposed CO2 target for 2030 implies that 60% of all new vehicles will be electric, an increase on about 9% today, said Mueller. Effectively forcing combustion engine vehicles off the road.

Synthetic fuel -- methane produced by tapping green power to make hydrogen and then combining it with carbon dioxide -- can be added to gasoline or substitute it completely, requiring no or few changes to combustion engines and gas station infrastructure its proponents say.

(Also read: Climate plan for EU's transport won't cut carbon far enough)

Germany’s BDI industry lobby last year said e-fuels could realistically corner an 8% share of the transport fuel market by 2030. Europe’s biggest car market has a current car fleet of over 58 million vehicles, of which 1.4% were hybrid or full-electric by January. The government targets an electric-only share of up to 10 million by 2030.

For Bosch, the proposed CO2 cuts “don’t make sense" and set over-ambitious ecological targets that will conflict with economic and social reality, the company said in a Sept. 23 note.

Bosch is committed to supporting the switch to electric cars, investing 500 million euros in the technology this year, but envisages e-fuels playing a significant role in cutting combustion engine emissions.

First Published Date: 24 Sep 2020, 19:30 PM IST
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