Following the recent European elections in June, the political discourse in Brussels has once again turned towards the “Fit For 55” initiative and the pivotal year 2035, beyond which car manufacturers would be restricted to selling only electric vehicles.
What was less foreseeable, however, is that the challenge to this deadline comes from the European People’s Party (EPP), the largest parliamentary group in Europe, which includes Ursula Von Der Leyen, and which had previously championed the initiative.
EPP’s Changing Stance
The EPP, having secured the largest share of seats in the recent European Parliament elections with 188 out of 720 seats, remains a dominant force. Recently, during a meeting in Portugal, the group deliberated on their political priorities for the next five-year term.
Among these priorities, as reported by Reuters, is a draft document proposing a revision of CO2 reduction rules for new cars and vans, allowing the use of zero-emission alternative fuels beyond 2035.
Investment Implications
This policy shift comes after significant investments have already been made towards the 2035 goal. The original 2023 regulation permitted the use of synthetic e-fuels in combustion engines, a provision likely to be emphasized by the EPP, especially by its German members who are closely linked to the German automotive industry.
This adjustment would enable automakers to develop and sell a new generation of combustion engine vehicles running exclusively on certified zero-emission fuels, equipped with technology preventing their operation if filled with traditional petrol or diesel.
Industry Concerns
However, there is a concern that the EPP might also advocate for exceptions for traditional fuels, essentially backtracking on the electric vehicle mandate. This potential reversal is contentious even within the automotive industry, as it would undermine years of substantial investments in new models, technologies, and facility reconversions.
Luca De Meo, CEO of Renault and a known critic of the “Fit For 55” policy, has expressed his disapproval of delaying the 2035 ban. He argues that such a move would be a significant error, granting a competitive edge to Tesla and Chinese manufacturers in the field of new technologies, while European companies stagnate.
Political Crossroads
Ursula Von Der Leyen and other presidential candidates are now caught between opposing forces. On one side, they require the support of the EPP for a majority; on the other, they face resistance from the Socialists and Democrats, another major European party that opposes any weakening of climate change policies.
This delicate balance poses a significant challenge for European leadership, as they navigate between maintaining political cohesion and advancing environmental commitments.
