November 22, 2024
Italian PM Giorgia Meloni condemns EU’s green rules for struggling auto industry #ItalyFinance

Italian PM Giorgia Meloni condemns EU’s green rules for struggling auto industry #ItalyFinance

CashNews.co

Stay informed with free updates

Italy’s Giorgia Meloni has lashed out at the EU’s ban on the sale of new fossil fuel-powered car engines after 2035 as a “self-destructive” policy, and vowed to press Brussels “to correct these choices”.

Addressing the powerful Italian industrial association Confindustria on Wednesday, the prime minister called the “forced conversion” to electric propulsion of the entire EU market for new light vehicles within a decade “not very smart as a strategy”.

“The green transition cannot mean destroying thousands of jobs, or dismantling entire industrial segments that produce wealth and employment,” Meloni said, as she slammed the “disastrous effects” of the European “Green Deal” and its “ideological approach”.

Her fierce criticism comes as Italy, Germany and some eastern European countries such as the Czech Republic — which makes auto components — step up calls for an early, urgent review of the EU’s car emission rules, which in effect amount to a ban on the sale of new combustion engines by 2035.

The rules, adopted in 2023, are among the most contested parts of the bloc’s ambitious Green Deal climate policy, with carmakers — and the governments of car-producing nations — calling for a delay in the ban or more flexibility in the rules, including allowances for the use of carbon-neutral e-fuels.

“Europe is losing credibility because it’s setting targets that it can’t even achieve itself,” said Germany’s transport minister Volker Wissing, a member of the liberal Free Democratic party, while attending a transport industry trade fair this week.

Though Wissing agreed it was necessary to set goals, he said they should be realistic and “possible to implement in practice”.

Brussels can review the legislation in 2026, prompting conservative lawmakers — including members of Ursula von der Leyen’s own European People’s party — to ask Brussels to use that opportunity to rethink the ban.

Italy is even pushing for the review process to be brought forward to next year, as its own car industry faces a deepening crisis of collapsing production amid muted consumer demand for electric vehicles.

According to the National Auto Industry Supply Chain Association — which represents Italy’s car and component makers — just 225.000 passenger cars were produced in Italy in the first seven months of 2024, down 35.5 per cent compared with the same period last year.

“The Green Deal as it was designed has failed,” Italian industry minister Adolfo Urso told a recent business forum. “The European auto industry is collapsing. Decisions have to be made; we cannot wait two years.”

Stellantis, the international group that is the largest automaker in Italy and owner of the Fiat brand, last week announced a four-week suspension of production of electric Fiat 500s at its historic plant in Turin, citing weak demand.

In her address to the business community on Wednesday, Meloni argued that the EU should have followed a principle of technological neutrality, allowing each member state to define their own tactics for cutting CO₂ emissions, rather than prescribing a wholesale switch to EVs.

“We want to defend European industrial capacity,” she said, arguing that “we do not own the raw materials and do not control the value chain” for EVs.

“I commit to continuing to work vigorously to correct these choices,” Meloni said. “We want to follow a path of reducing polluting emissions . . . with common sense . . . taking advantage of all available technologies . . . saving tens of thousands of jobs.”

However, Teresa Ribera, the EU’s presumptive new executive vice-president overseeing green policy, said in an interview with the Financial Times that setting the phaseout date for combustion engines from 2035 had given the European car industry the “stability and reliability” they needed to build up the EV ecosystem.

In a presentation published this month, the car industry body ACEA said that in 2023 “EU car sales climbed for the first time since 2019 with battery-electric models nearly tripling their market share”.

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here

Video: The end of the combustion engine? | FT Energy Source