E-fuels are not taking off: Carbon-Neutral Fuels ousted from Euro 7

The revision of the Euro 7 standards has, in the last months, sparked a heated debate that will deeply affect the interinstitutional negotiations starting soon. Both co-legislators partially watered-down Commission’s proposal in their approved positions, especially when it comes to green ambitions.

During last plenary session, MEPs adopted their negotiating position on the Regulation for revising EU rules for type-approval and market surveillance of motor vehicles (Euro 7) with 329 votes in favor, 230 against, and 41 abstentions. In the end, the inclusion of measures in support of alternative fuels, such as e-fuels and biofuels, which were strongly advocated by the right wing of the parliament (ECR, ID, and EPP) did not make it to the final version of the text. Still, rapporteur Alexandr Vondra (ECR, CZ) cheered the result, claiming to “have successfully struck a balance between environmental goals and the vital interests of manufacturers”.

Member states also voiced their concerns over introducing stricter emission regulations for vehicles, including new testing requirements and exhaust emission limits. In particular, Bulgaria, Czechia, France, Hungary, Italy, Poland, Romania, and Slovakia signed a Non-paper on the proposal of new vehicle emission standards Euro 7, demanding to postpone the implementation date of the Euro 7 regulation, citing it as unrealistic. Additionally, they called for distinguishing between new vehicle models and new registrations and establishing different requirements for each category of heavy-duty vehicles.

While some of these elements have been received in the positions of the Parliament and the Council, such as the postponement of the application date for the new rules, the main element of disagreement with the co-legislators remains the role of e-fuels in the transition to net-zero mobility.

Synthetic fuels or e-fuels are produced by combining hydrogen and carbon with energy to recreate a hydrocarbon. For them to be considered “carbon-neutral,” hydrogen must be produced through water electrolysis, and carbon must be obtained through direct carbon capture using additional renewable electricity. They have been the subject of great attention lately since they could power internal combustion engine (ICE) cars and vans, which will not be allowed to be sold anywhere in the EU after 2035, according to the new Regulation (EU) 2023/851 on CO2 emission performance standards for new passenger cars and light commercial vehicles, adopted in April 2023. Thanks to the insistence of Germany, the European Commission has included in the final text of the Regulation a promise to draft a plan to allow sales of new cars with internal combustion engines after 2035 if they run only on climate-neutral e-fuels (CNFs).

Current rapporteur for the Euro 7 Regulation Alexander Vondra stood out as one of the loudest opponents of the ICE car ban. Throughout the discussions in the Parliament, Vondra had made several attempts to include CNF in the revised Regulation.  However, amendments which have introduced a definition of ‘CO2 neutral fuel’ and a new category ‘Euro 7 CNF vehicle’ did not pass, neither at committee level nor in the plenary session, lacking of the support of the liberals. On the contrary, three identical amendments from Renew, S&D, and the Greens were adopted to avoid the possibility that the Euro 7 Regulation would be modified if the European Commission were to present a text that provides, starting from 2035, for the approval of new light vehicles only if powered by CO₂ neutral fuels.

Left parties managed to win this battle, but not the war. Despite S&D shadow rapporteur Christel Schaldemose (S&D, DK) called to reject the text, a non-negligible part of her group eventually decided to vote in favor of the final compromise, supporting a “deal in the European Parliament [that] is not worthy of being labeled as Euro 7”, Schaldemose said.

Negotiations will now begin with the Council of the EU, which adopted its position (“general approach”) on 25 September. For once, the two co-legislators seem to have similar views on the text. The Chief negotiator for the Parliament, MEP Vondra, already anticipated that it will not be difficult to strike a deal.