Italy Goes against EU’s Fossil Fuel Car Ban

by | Mar 12, 2023 | Europe

Italy’s Transport Minister Matteo Salvini called a rapid switch to electric vehicles “suicide” and a “gift” to Chinese industry.
Image Pixabay

Italy intends to vote against European Union’s plans to ban the sale of new gasoline and diesel cars in 2035. Rules approved by the European Parliament will require that in 12 years automakers must achieve a 100 percent cut in carbon dioxide emissions from new cars sold, which would make it impossible to sell new fossil fuel-powered vehicles in the 27-country bloc. EU countries agreed to the rules in the fall of 2022, but still need to formally rubber stamp them. Italy’s Transport Minister Matteo Salvini called a rapid switch to electric vehicles “suicide” and a “gift” to Chinese industry. Car batteries are being produced abroad, mainly in China, rather than in the EU. “The ideological fundamentalism of electricity alone is suicide and a gift to China,” he added. Millions of workers would be laid off and thousands of businesses shut down. The plan has gone down badly in Italy, where brands such as Fiat, Ferrari and Alfa Romeo are still largely focused on internal combustion engine technology.

Italy’s counter-proposal is to limit the reduction to 90 percent, giving industries the chance to adapt. Italy’s domestic automotive industry employs over 270,000 workers directly or indirectly and accounts for more than 5 percent of the country’s gross domestic product. Sales of full-electric cars in Italy fell 27 percent last year, accounting for just 3.7 percent of total new-car registrations. The transition to EVs in Italy is already having a social cost. Stellantis announced 2,000 job cuts in Italy, or about 4.3 percent of its 47,000 workers in the country where Fiat was founded in 1899. The automaker has cut over 7,000 workers in the country in the last three years. Stellantis also makes Jeep and Chrysler vehicles.

But Italy is not the only naysayer. Germany, Poland and Bulgaria also have issues with the ban. The four countries represent around 42 percent of the EU’s population — over the 35 percent threshold needed to block legislation.

Germany’s Transport Minister Volker Wissing warned that Germany would withhold its support unless the European Commission put forward a plan for e-fuels to have a role after 2035. E-fuels in this context are synthetic fuels made from renewable energy and captured carbon dioxide that have the same properties as fossil fuels.  E-fuels would allow automakers to continue producing conventional combustion engine vehicles rather than switching to battery vehicles. Wissing said, “Whoever is serious about climate-neutral mobility must keep all technological options open and also use them.” “I don’t understand this fight against the car and why people want to ban some technologies.” Germany’s Porsche-driving Finance Minister Christian Lindner, added, “Our goal is to allow new cars with internal combustion engines to be registered after 2035.”

The German automotive industry makes up about 5 percent of the nation’s economy and employs more than 800,000 workers. The sector includes specialized parts-makers that have developed over more than a century of supplying automakers including BMW, Mercedes Benz and Volkswagen with components for their internal combustion engine vehicles.

Road transport is one of the most carbon-intensive sectors in the EU, generating about a fifth of the bloc’s emissions, with cars accounting for around 15 percent of EU’s carbon dioxide emissions. ACEA, Europe’s automotive lobby group, noted that the issue was to cut emissions, not get rid of a technology. “As the current energy crisis demonstrates, diversification is essential to improve Europe’s resilience.” Further, spiraling inflation and the price of batteries increasing for the first time in over a decade mean affordability risks become a “bigger obstacle” in the transition to zero-emissions.

While sales of electric cars are taking off, there are concerns over charging times and the comparatively high costs of EVs as consumers seek access to affordable vehicles. Further, electric cars are no longer cheaper to operate than ICE vehicles due to the soaring cost of energy in the EU. The EU rules could also lead to people driving older internal combustion engine cars after new sales are banned because they cannot afford an electric replacement. Because EVs are also less complex to make, there will be job cuts. Ford is dismissing about 11 percent of its workforce in Europe as the U.S. automaker cuts costs caused by the automotive sector’s shift to EVs. According to Ford, of the total 3,800 jobs to go, workers in Germany and the UK will be hardest hit with about 2,300 and 1,300 positions to be eliminated respectively over the next three years.

Conclusion

Finally, there are Europeans bringing up the idiocrasy of the ban on fossil fuel vehicles, the timing of such bans, and the dependence by Western countries on China’s batteries and minerals, not to mention the comparative cost of electric vehicles to ICE vehicles and the increasing cost of operating EVs as electricity costs in Europe skyrocket due to climate policies.  Critics of EU’s new rules on banning ICE vehicles note that banning technologies should not be the issue and that the current energy crisis in Europe demonstrates that diversification is essential to improving Europe’s resilience.

This should be a lesson to the Biden administration, who is following in Europe’s footsteps regarding reducing carbon dioxide emissions, banning fossil fuel cars for replacement by EVs, and in transitioning to intermittent wind and solar generating technologies that cannot meet demand when the sun does not shine and the wind does not blow. As the rubber of EVs begins to hit the roads of Europe, Europeans are beginning to have second thoughts about what it means for personal transportation in the future, as well as their economic and national security.

Made available by IER.

The Institute for Energy Research (IER) is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. IER maintains that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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