It sounds hard to believe that Europe’s plan ushered in the era tram almost went bad because an extremely expensive technology was barely available, but that’s exactly what happened.
For several weeks last month, Germany refused to support a new EU ban on internal combustion engine cars, effective from 2035, requiring Brussels to protect internal combustion engine vehicles. electronic fuel. With the auto industry employing some 786,000 people in Germany, it’s understandable that Berlin will try to protect jobs threatened by the gradual phase-out of the engine. However, the battle for e-fuel makes little sense.
Analysts doubt that synthetic fuels will make a meaningful contribution to the industry’s attainment of carbon neutrality. Only 2% of EU vehicle fleet could run entirely on e-fuel by 2035, lobby group Transport & Environment speak in October, citing industry forecasts. Many assume that the scarce supply of e-fuel for many years to come will be better used by industries that cannot convert to battery power easily, such as airfreight and shipping.
One of the biggest limitations is cost. E-fuel is generated using renewable electricity to split hydrogen from water and combine it with carbon, an inefficient and expensive process. Synthetic diesel oil production costs between $3.50 and $7 a liter, according to BloombergNEF estimate — about four to seven times the price of conventional diesel in the European wholesale market.
Even after many years expand the scale of productione-fuel for passenger cars will likely still be about four times more expensive than fossil fuel gasoline, while improvements in battery technology will make electric vehicles more affordable and improve performance. them, Al Bedwell of LMC Automotive wrote in a report. blog post last month.
Gerrit Marx, CEO of Italy truck and bus maker Iveco, last week called the technology “Champagne of Thrust“ that only makes sense to a small group of wealthy individuals who want to own their own internal combustion luxury and performance cars.
“If you have a Ferrari or if you drive your car porsche Turbocharged once a week, you wouldn’t care if a liter costs €5 or €8, but that’s not fuel for the future,” Marx said in an interview.
So why is Germany on such a rampage? Many point to the country’s unpredictable coalition government consisting of the centre-left Social Democrats, the environmental Greens and the pro-business Liberal Democrats. FDP Finance Minister Christian Lindner and his party colleague Volker Wissing, Germany’s transport minister, led the e-fuel attack in Brussels.
German media report in July that Oliver Blume, then just head of Porsche and now CEO of volkswagen, regularly contacts Lindner about e-fuel. A few months earlier, Porsche joined a group of investors bet 260 million USD about a startup building an e-fuel plant in Chile.
While the FDP has said it wants to leave all technology options open as the industry cuts emissions, critics have accused the party of trying to appeal to voters and boost its standing in government. Germany after a series of poor performances in regional elections.
Either way, Brussels finally gives in, giving Germany guarantee that vehicles like the Porsche 911 sport car — a model that Lindner already owns — can get a future exemptions if they only run on e-fuel. While most industry leaders breathed a sigh of relief that Europe was moving toward phasing out fossil fuels in cars, Germany’s last-minute armed action alarmed some. that Berlin will establish a dangerous precedent to approve other parts of the Green Deal.
“What if other governments decide to do something similar on any given issue? The rules of procedure are for everyone,” Teresa Ribera, Spain’s deputy prime minister, said last month.
The German government’s behavior underscores the disruptive nature of Europe’s efforts to become carbon neutral by mid-century. The country’s auto industry has spent decades perfecting the production of crankshafts, diesel injectors and other parts not needed for electric motors, and is now under pressure to retool the components. products and factories that have the potential to have a serious impact on employment. Volkswagen, Mercedes-Benz, BMW car and Porsche has already begun the transition, but is still behind Tesla in electric vehicle sales.
There is no argument that this transition will be politically risky. Unfortunately for government leaders, e-fuel doesn’t seem to be the savior of “das Auto” or German jobs.
LMC’s Bedwell writes: “E-fuel is a hot topic, providing an opportunity for an industry undergoing tremendous change to get some useful political concessions from regulators. “But today’s evidence indicates that e-fuel in Europe’s light vehicle sector is falling into a very small corner, or not flourishing at all.”
