European elections: no respite for gasoline and diesel but good news for e-fuels

The good news emerging from the weekend’s results of elections to the European Parliament is that the 2035 ban on sales of vehicles powered by fossil fuels looks safely intact.

However, after gains for the centre-right European People’s Party (EPP) and losses for the liberal Renew Europe and centre-left Socialists and Democrats (S&D), we might expect greater support for hydrogen and e-fuels under the banner of technology neutrality.

The EPP gained 10 seats to remain the parliament’s largest party with 186 MEPs, while S&D lost four seats to drop to 135 and Renew shed 23 representatives to fall to 79. But, crucially, while further right-wing grouping such as the European Conservatives and Reformists (ECR) and Identity and Democracy (ID) made marginal gains, they did not win sufficient numbers of new MEPs to allow the EPP the realistic prospect of forming a ruling coalition of the right that could try to delay the phaseout of the sale of fossil-fuelled cars.

S&D has already ruled out joining any coalition involving far right parties, while a more right-leaning coalition of the EPP, Renew and the EPR would be insufficient to give a majority in the 720-member chamber. Renew is unlikely to countenance an alliance with more extreme ID or the 34 far-right MEPs from Germany, Hungary, Poland and Bulgaria that sit outside any of the larger blocs, cutting off the path to a viable centre/right alliance.

As such, a grand coalition between the EPP, S&D and Renew looks the most likely outcome. And that means, even if the EPP might hanker after throwing some red meat to its conservative supporters by pushing back on 2035, it is unlikely to find its partners prepared to agree.

EV inFocus uses “might hanker” deliberately as — while there was pre-election noise about the EPP making changes to the 2035 ICE sales ban a priority — there was no commitment to it in the grouping’s manifesto. And indeed, by no means did the EPP stand on an anti-environmental platform, much less one of climate denial. “Clean energy is not only good for the planet but also for our security” and “we are clearly committed to the 55pc emissions-reduction target and the goal of climate neutrality by 2050” are hardly the language of those about to tear up the EU’s Green Deal.   

But there is more nuance in the EPP’s position compared to, for example, the worryingly soundbite-heavy but largely substance-free manifesto offered up by S&D. The grouping makes clear that Europe’s move to net-zero must work for the continent — “we shifted the climate agenda to being an economic one,” the manifesto explicitly says.

Economics first

In other words, EPP support for net-zero goals are closely bound to Europe growing a profitable low-carbon economy. It sees the Green Deal as “designed as an opportunity to build our future prosperity”, pointing out that, in 2022 as an example, Europe “successfully reduced our emissions while growing our economy”.

“To achieve our ambitious goals, we must make climate policy go hand in hand with our economy and society,” it says. “Because we know that, without climate protection, our economy cannot remain competitive in the long term but that, without a competitive economy, there can be no sustainable climate protection either.”

In that, the EPP contrasts its position with Europe’s left-leaning parties as the “Green Deal for us is not a new ideology as advocated by the Greens or the Socialists, it is the hallmark of the more prosperous, innovative, competitive and sustainable Europe that the EPP envisions”. And that is likely to be at the crux of environmental policy discussions, including e-mobility, in the post-election coalition building.

Supply chains

Significantly expanded EV adoption, including that the continent “will need 60 times more lithium for a sustainable battery supply in 2050 than it does today”, is acknowledged by the grouping. And a stronger EPP voice in the European parliament should, as a result, mean redoubled efforts on a reshored and ‘friend-shored’ EV battery supply chain.

“Global technological leadership in the field of e-mobility will not succeed without rare earth elements from Africa, Latin America and Asia,” the manifesto says. “We will promote a common European resource strategy for future innovations, identifying the existing resources worldwide and using them in Europe while promoting diversification to avoid dependencies from third countries.”

Specifically, it also promises support for the Critical Raw Materials Act, as well as for European e-mobility manufacturing in its entirety. “From wind to steel, from batteries to electric vehicles, our ambition is crystal clear: the future of our clean tech industry has to be made in Europe,” it says.

The EPP also advocates a “strong EU financial arm to back up our net-zero industrial and green ambitions for Europe to be able to compete globally”, which could assist building out these new value chains. And it supports “developing the home market for our clean-tech industries” as well as acknowledging that “new technologies have the potential to revolutionise the way we move, making our mobility smarter, more efficient and more sustainable”, which again sounds promising for supporting European EV manufacturing and purchasing.

Technology neutral?

But Europe’s switch to BEVs may not be entirely unaffected by the EPP’s boosted bargaining position. It is clear what the grouping terms ‘technology neutrality’ is a borderline obsession, which could well mean more fertile ground for those seeking subsidies to try to shoehorn uncompetitive hydrogen and e-fuels into the future zero-emission from tailpipe European passenger vehicle market.

It is a theme the manifesto returns to repeatedly, saying:

—    An open and neutral technology approach as guiding principle is a driver for innovation

—    We need more technology – not bans

—    We will achieve the best solutions only if we use all technological possibilities without any prejudice or ideology

—    We defend the principle of technological neutrality as well as a policy built on creating incentives for businesses and industry

—    The EU can set targets for reducing greenhouse gas emissions, but it must leave room for private, local and industrial players to find appropriate technological solutions

—    Engineers, not politicians, together with the market should be deciding on the best technology in order to achieve carbon neutrality.

There is nothing inherently wrong with adopting a technology-neutral approach. The founders of EV inFocus, for example, are believers in an ‘all of the above’ approach to the wider energy transition, which includes openness to some approaches — such as CCS (including CCS-ready gas-fired power replacing coal in the generation mix), nuclear, and nature-based solutions — that are not everyone’s cup of tea.

Where we would take issue, though, is with politicians advocating technology neutrality but, through pressure from backers from vested interests, in practice skewing the playing field to support said backers’ solutions when there is no basis in economics or physics to warrant their development.

And, based on its manifesto, it is hard to escaped the suspicion from that, far from letting the market decide on post-2035 ZEVs, the EPP has already been captured by the hydrogen and e-fuel lobby.

“The EPP advocates a technology-neutral approach to developing alternative fuels, hydrogen technologies, and new power trains for vehicles, aircraft and vessels. We support new sustainable liquid fuels since they can be used with the current refuelling infrastructures and supply chains,” it says.

“We need a rapid ramp-up of international hydrogen production, creating the conditions to enable a functioning transport infrastructure, as already provided for in the EU hydrogen strategy,” Sounds less like letting engineers decide, and more like letting the engineers that work on ICEs for Europe’s legacy OEMs decide…