EU nations agree to phase out CO2-emitting vehicles by 2035

April 13, 2023

A landmark law to ban the sale of new CO2-emitting vehicles in the European Union was finally approved on Tuesday after Germany won an exemption for e-fuel vehicles. After being delayed for weeks due to Germany’s last-minute opposition, the main climate policy for cars in Europe can now go into effect thanks to the approval of the EU’s energy ministers.

E-fuels, such as e-kerosene, e-methane, or e-methanol, are created by combining hydrogen produced from renewable or CO2-free electricity with CO2 emissions that have been captured. The good news for manufacturers of ICE (Internal Combustion Engines) components and businesses that transport gasoline and diesel is that e-fuels can be used in current ICE vehicles and transported via existing fossil fuel logistics networks.

According to EU law, all newly sold cars must have zero CO2 emissions starting in 2035 and CO2 emissions that are 55% lower than in 2021 starting in 2030. The goals are made to encourage Europe’s new car fleets to rapidly decarbonize.

A de facto ban on the sale of new cars with internal combustion engines might have resulted from the fact that a car powered by gasoline has no chance of reaching that goal. E-fuel can be created by extracting hydrogen from water and carbon dioxide from the atmosphere. New synthetic fuels are created by combining these molecules. 

Importantly, the EU still needs to determine how to determine whether a vehicle with an internal combustion engine operating on the road after 2035 is actually using e-fuel instead of regular gasoline. With the new rules, it’s not entirely clear yet.

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