Volkswagen hails EU deal over e-fuels to drive Porsche cars
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Volkswagen said the European Union’s deal on e-fuels, or synthetic fuels, will help with special applications such as emergency vehicles and low-volume models like Porsche’s 911 sports car, following an agreement over the weekend on landmark regulation to make all European cars carbon-neutral by 2035.
Europe’s biggest carmaker remains committed to the electrification of its lineup with a goal of electric vehicle accounting for around 10% of sales this year and more than half at the end of the decade, VW said.
E-fuels, made using renewable energy and carbon dioxide captured from the air, aren’t seen as a viable solution for the vast majority of cars, given their high cost and current lack of availability. Instead, the bulk of European carmakers are expected to remain focused on battery-powered vehicles.
VW and Porsche chief executive Oliver Blume came under fire last year, boasting at an internal event that he successfully lobbied for e-fuels to be included in the new German government’s coalition agreement.
The EU’s deal means that Germany can formally approve an agreement reached in October that requires new cars to be zero-emissions, a key pillar in the EU’s plans to reach climate neutrality by 2050.
Volkswagen’s efforts on synthetic fuels are led by Porsche, which doesn’t plan to make its lucrative 911 model with a plug, with a pilot plant in Chile.
“We see e-fuels as a useful addition to the existing fleet of combustion engines and for special applications,” VW said in a statement on Monday.
“E-fuels from renewable energies are a contribution to sustainable mobility — the agreement gives manufacturers and above all consumers a clear perspective for planning,” the car maker said.
Shares in VW rose almost 2% in Frankfurt trading, taking gains this year to over 4%.
A vote this month, which was expected to be a simple procedure, was delayed due to objections from Volker Wissing’s pro-business FDP party, the junior member of Chancellor Olaf Scholz’s governing coalition.
Germany’s VDA car lobby said it supported a deal that allows several technologies to reduce CO2 emissions with significant challenges that need to be overcome to scale up production.
“Now we have to enable e-fuel output at scale and at competitive prices, which can only happen with large range of strategic decisions,” the lobby group said in a statement. “Brussels and Berlin need a maximum of stable energy partnerships in the many countries that have excellent conditions to produce e-fuels,” the business group said.
Italy pushed for the EU plan to include provisions for biofuels and lobbied to delay proceedings for at least two weeks, according to people familiar with the matter. Poland and Greece also raised concerns around the transparency of the procedure. But approval is likely to be a formality this week, with a majority of member states supporting the rules.
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