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EU climate agenda at risk after German pushback

The EU’s ambitious climate agenda is beginning to unravel after a last-minute decision by Germany to block a ban on new combustion engines was followed by other capitals raising objections in a bid to shield their industries.

Limits on pollution from heavy trucks and industrial-scale farms are among rules that member states want to weaken, as governments grapple with how to pursue climate goals amid high inflation and uncertainty over energy prices.

Niels Fuglsang, a Danish socialist politician involved in negotiations on EU energy efficiency rules, described lawmakers as being in “a battle” over the green transition as they contend with pressure to ease energy prices for industry and balk at the costs of climate action.

“The fight ain’t over yet,” Fuglsang said.

The European Commission has proposed a series of initiatives aimed at reaching its overall goals of cutting greenhouse gas emissions in the bloc by 55 per cent by 2030 and reaching net zero emissions by 2050.

But Germany reneged this month on a deal to ban the sale of new internal combustion engines in the EU by 2035, days before it had been scheduled for final approval. That move risks a wider “contagion” across climate laws, one EU diplomat said, with smaller countries following Berlin’s lead and “[reducing] ambition on other things”.

“The spirit of the [EU’s climate law] is precisely to converge towards compromises. And in that context, [Germany] already supported this compromise. So it is completely unacceptable,” said Pascal Canfin, a French liberal who chairs the European parliament’s environment committee.

In a meeting between member states last week on emissions limits for heavy trucks and buses, Italy and the Czech Republic resisted proposed rules using similar arguments to those Germany deployed against the combustion engine ban, said two people who were present.

Those people said they were concerned the tactic of arguing for supposedly carbon neutral e-fuels to be permitted beyond 2035 was becoming a pattern.

Berlin has demanded that Brussels accommodate e-fuels within existing emissions rules or create additional legislation for a crediting system for the embryonic fuel type, according to a letter sent to the commission this week and seen by the Financial Times.

Ministers from eight countries, including Germany, Italy, the Czech Republic and Portugal, formed a coalition on Monday to reject separate rules on overall vehicle emissions.

Czech transport minister Martin Kupka said the existing proposal would lead to “a fundamental reduction in the production of new vehicle models, a jump in their prices, and thus further obsolescence of the vehicle fleet in Europe”.

Italy’s rightwing prime minister Giorgia Meloni joined the backlash on Wednesday following a narrow vote in the European parliament in favour of rules to promote renovation and insulation of buildings.

The EU’s growing environmental push, if poorly formulated, “risks damaging our economic fabric”, she said.

Steffi Lemke, Germany’s environment minister, attends an EU environment ministers council in Brussels © Olivier Hoslett/EPA-EFE/Shutterstock

A senior EU diplomat said member states with a less ambitious approach to climate goals were saying “if we can reopen [the combustion engine] file, why can we not reopen others?”

Upcoming laws, such as an update to the bloc’s flagship emissions trading system, which is due for approval in late spring, may also be under threat, the diplomat added.

The EU’s position as a global climate leader is already under pressure from the US, which last year set out a $369bn spending plan to boost its green industries.

Brussels has responded this week with its own proposals to boost domestic clean technologies. But any further blocks to the EU’s Green Deal climate law — which makes emissions targets legally binding — and wider environmental agenda could put its credibility at risk, warned analysts and campaigners.

“We have been very good last year about isolating the green agenda from the energy crisis and seeing that the energy crisis would not compromise the green agenda,” said Simone Tagliapietra, senior fellow at the Bruegel think-tank.

It was “really nonsense and dangerous” that EU countries were now pushing back against climate laws, he added. “Things have spilled over in a way that the Germans probably didn’t intend themselves.”

The commission said in an October report that the EU was “on track to deliver on its climate ambition” but that “swift action” was required to meet the 2030 goal. If countries follow Germany’s lead, there could be long delays while negotiators fight for compromises.

The vote on the combustion engine ban has been postponed indefinitely and there has been no sign so far of a resolution that will satisfy Berlin’s transport ministry.

An EU official said that other green laws, such as rules to improve natural habitats, were being challenged. “The big danger” was that other countries would now see the potential to act against regulations after final negotiations had been concluded, the official added.

An update to the bloc’s regulation of harmful chemicals has been postponed to the end of the year, following pressure from conservative lawmakers in the European parliament who argued it would impose an excessive burden on businesses already facing steep inflation.

A flagship plan to cut industrial emissions, including from intensive agriculture, has been significantly weakened by ministers, who agreed on Thursday to reduce the number of cattle and pig farms in its scope by more than half compared with the commission’s original proposal.

“There are some countries in eastern Europe that didn’t want the Green Deal at all. They are seeing an opportunity and what Germany has done doesn’t help that,” said a conservative EU politician.

Frans Timmermans, the EU’s climate commissioner, told journalists on Thursday that Germany should “respect its agreement” and that climate legislation was crucial in the face of increasingly dramatic weather conditions. “We have to act and we have to act now.”

Additional reporting by Amy Kazmin in Rome

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