Germany and the European Union reached a compromise over a proposed ban on combustion-powered vehicles starting in 2035, according to Reuters. Automakers can continue to sell ICE-motorized products, but they must run on e-fuel.


Germany and Italy, which both have large auto industries, pushed back against the original proposal that would have completely started phasing out ICE vehicles in 2035. As part of this compromise, the European Commission agreed to create a new vehicle category for models that can only run of e-fuels. A vote in Brussels, Belgium, on Tuesday, March 28, is the next step in the process.

Vehicles running on e-fuel in Europe will require technology to prevent them from using gasoline or diesel. There are no details available yet about how automakers would implement these systems.

E-fuel comes from a process involving capturing carbon dioxide and making hydrogen from renewable energy. It's carbon neutral during combustion because the CO2 returns to the atmosphere.

However, e-fuel is not yet available in large amounts. Porsche is investing to improve in the technolgy. In a pilot phase, Porsche's production site in Chile aims to make 34,342 gallons per year. The company projects that it could ramp up to 145 million gallons a year, but that's still a fraction of the 134.83 billion gallons of fuel used in the Unitted States in 2021.

"Some fuels are more inefficient than others, that's not a secret. But if you produce them in those regions of the world where sustainable energy is available without any limits, then this argument can't be used any longer," said VW Group CEO Oliver Blume

In October 2022, the European Union announced the finalized the deal to begin phasing out ICE vehicles. The ban only applied to new cars. Automakers producing fewer than a 1,000 vehicles a year were exempt from this decision. The transport ministers from the Czech Republic, Slovakia, Italy, Poland, Romania, Hungary, and Germany refused to ratify the plan, which forced the compromise.

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