Italy makes biofuel demand as EU attempts to unblock combustion engine phase-out

(C) Reuters. FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, March 1, 2023.REUTERS/Johanna Geron//File Photo

By Kate Abnett

BRUSSELS (Reuters) – Italy has warned the European Commission that it will only support a solution to unblock the EU’s planned phase-out of combustion engine cars by 2035 if it allows the sale of cars running on biofuels to continue after that date.

The European Union is racing to save its main policy for cutting car CO2 emissions, after Germany lodged last-minute opposition to the law, which would phase out sales of new combustion engine cars from 2035.

Italy and Germany have both demanded that the EU allow sales of new combustion engine cars after 2035 if they run exclusively on carbon neutral e-fuels – which could support manufacturers of combustion engine cars and parts.

In a letter to the Commission this week, Italy said the offer must also cover biofuels – those derived from biomass like plants.

“Italy would not accept an unduly restricted interpretation by the Commission of ‘CO2 neutral fuels’, that includes only e-fuels and not biofuels,” three Italian ministers, of transport, environment and enterprises, said in the letter dated March 21 and seen by Reuters.

Brussels is in talks with Germany to attempt to resolve the row, with some officials hoping to reach a deal before a summit of EU leaders on Thursday. Countries including Poland and the Czech Republic have also raised issues with the law.

In an attempt to resolve it, the Commission has drafted a proposal to allow carmakers to register new cars that run exclusively on carbon neutral fuels. The draft, seen by Reuters on Tuesday, did not include biofuels in the definition of “carbon neutral fuels”.

A spokesperson for Italy’s transport ministry said it had not received a response to the letter.

The Italian ministers said in their letter that they expected the Commission to propose allowing sales after 2035 of cars running on any fuels that when combusted in an engine, only release CO2 emissions that were captured from the air during their manufacture.

A commitment from the Commission on when it will make this legal proposal could unlock a deal on the combustion engine phase-out, they three said.