German transport minister 'optimistic' EU e-fuels stand-off will be resolved

By Riham Alkousaa and Markus Wacket

BERLIN (Reuters) -Germany's transport minister on Friday said he was optimistic a dispute between Berlin and Brussels over the future of combustion engine cars running on e-fuels was close to resolution, though some questions still needed clarifying.

Berlin has been in talks with the European Commission over the past weeks about allowing registrations of cars running on synthetic fuels beyond the 2035 deadline for sales of CO2-emitting cars, agreed by European Union countries last year. A vote on the ban got delayed early this month by Germany's last-minute objections.

The original law would effectively ban registration of combustion engine cars after 2035, but Germany seeks an exemption for cars that run exclusively on climate-neutral e-fuel and legal assurances from the Commission.

Reuters reported earlier this week that the European Commission sought to break the impasse with a new draft plan to allow sales of such combustion-engine cars after 2035.

In a letter to the Commission seen by Reuters on Friday, Germany's transport ministry welcomed the EU executive's proposals but asked for legislation to ensure its implementation.

Berlin's demand for an exemption had "now been answered by the EU Commission with a letter that makes me optimistic," German Transport Minister Volker Wissing told a news conference on Friday.

"There are still questions to be answered. We're not fully in agreement yet," he added.

The minister and his FDP party, argue that combustion engine technology, in which Germany is a leader, should continue to be available to offer people more choices for carbon-neutral mobility in the future.

"To ban this technology now makes no sense. Because multiple offers create more and more competition and better prices for citizens," Wissing said.

Speaking in Brussels on Friday, German Chancellor Olaf Scholz also said he expected an agreement to be reached soon.

Separately, Economy Minister Robert Habeck said he believed the dispute had now been resolved and the issue should be settled on Tuesday.

EU energy ministers will meet in Brussels on Tuesday and have a chance to sign off on the law. The next opportunity would come at the next scheduled meeting of EU countries' ministers in late April.

The European Commission declined to comment on the latest proposals.

(Reporting by Kirsti Knolle, Kate Abnett, Riham Alkousaa and Markus Wacket, Writing by Friederike Heine and Riham Alkousaa, Editing by Clarence Fernandez, Miranda Murray and Tomasz Janowski)