Germany and Italy launch joint call to soften EU's 2035 new combustion engine car ban

Government members from Germany and Italy have announced that their countries will forge closer ties in a bid to loosen EU climate policy regulations, including the phase-out of internal combustion engine cars. German economy minister Katherina Reiche met with Italian enterprises minister Adolfo Urso at a German-Italian Ministerial Forum in Rome to discuss common goals in maintaining the competitiveness of industry.

A 24-point joint declaration, the Italian-German Action Plan, identified weakening the EU’s de-facto ban on new combustion engine cars from 2035 as one area of common interest for both ministers. The plan demanded that new plug-in hybrids and “highly efficient internal combustion engines powered by low- and zero-emission fuels" can be sold after 2035, as long as emissions are offset. The “automotive and car components industry are dramatically suffering from EU policies,” the ministers wrote. 

The countries also seek improvements in the EU’s carbon border adjustment mechanism (CBAM), which requires importers in energy-intensive industry sectors to pay if products, such as steel or fertilisers, have not been subject to the same emissions costs as EU-made counterparts. The ministers call on the European Commission to adopt measures to combat the risks of carbon leakage, and to only extend the system to emissions in the value chain that are not directly caused by companies if this does not result in higher electricity bills. They also demand that the EU revises the phase out mechanism for free emissions allowances for certain industries "until the CBAM has demonstrated its effectiveness."

In addition, the chemical sector “requires particular attention in this period of transition and structural crisis” due to its relevance both in terms of employment and its strategic value, the declaration stressed. Germany and Italy will therefore work with the Critical Chemicals Alliance, a recently launched EU initiative, to strengthen the competitiveness of European chemicals producers and work on the implementation of the EU’s Chemicals Action Plan to counter challenges like high energy costs and plant closures.

German and Italian officials will meet for government consultations on 23 January in Rome to update the German-Italian Action Plan and raise its level of ambition.