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The European Union is gearing up to enforce a new law that will require all new cars sold to have zero carbon emissions from 2035 after a three-week delay due to Germany’s U-turn. The EU autos industry is revving up its complaints against the proposal, with one CEO calling the new law “plain stupid”. And find out the most cost-effective way to manage peak flood flows in today’s ESG Spotlight.

European Union countries’ energy ministers are set to give final approval to the bloc’s law to end sales of new CO2-emitting cars in 2035, after Germany won an exemption for cars running on e-fuels.

The EU law will require all new cars sold to have zero CO2 emissions from 2035, and 55% lower CO2 emissions from 2030, versus 2021 levels. The vote comes three weeks later than planned after Germany’s transport ministry lodged last-minute opposition to the law, threatening to derail the EU’s main policy for bringing cars in line with its climate change targets.

The European Commission struck a deal with Germany over the weekend to resolve the row, by offering assurances that combustion engine cars that only run on e-fuels will be exempted from the 2035 ban. Most countries are likely to back the law, EU officials said, which would allow it to enter into force. Italy and Poland are set to oppose, with Romania and Bulgaria expected to abstain.

An exhaust pipe of a car is pictured on a street in a Berlin, Germany, Feb 22, 2018. REUTERS/Fabrizio Bensch/File Photo

The new proposals have also stirred up the EU autos industry recently as carmakers argue that the new rules are too costly, rushed and unnecessary. The European Commission says the rules are needed to cut harmful emissions and prevent a repeat of the Dieselgate scandal.

European Union countries and lawmakers will negotiate “Euro 7” proposals this year on tighter limits for car emissions – for diesel cars, but not petrol – and for heavy-duty trucks and buses, including nitrogen oxide and carbon monoxide.

The Commission’s proposal widens real-driving emissions (RDE) testing and adds continuous testing of emissions via an on-board monitoring system. Euro 7 would take effect in mid-2025 for cars and in mid-2027 for trucks and buses. The rules would also cover tyre and brake emissions.

Executives including Stellantis CEO Carlos Tavares say the rules are “useless” while carmakers invest tens of billions of euros in electric vehicles (EVs) and start phasing out fossil-fuel cars. Iveco CEO Gerrit Marx called the proposals “plain stupid”.

Mattias Johansson, Volvo Cars’ head of governmental affairs, told Reuters the 2025 deadline left “practically no reasonable lead time” to make engine changes. Volvo has committed to being fully electric by 2030.

Lobby group the European Automobile Manufacturers’ Association says pollutant reductions from Euro 7 will be minimal. The Commission argues they will be significant.

Marie-Eve Volkoff, 85, gestures during an interview in her apartment in Geneva, Switzerland, March 13, 2023. REUTERS/Emma Farge

Galina Angarova (Buryat), executive director at Cultural Survival, a nonprofit organization that fights for Indigenous Peoples’ rights, shares her thoughts on supply chain abuses harming people and environments during mineral extraction for the electric vehicle transition:

“As the world scrambles to address the climate crisis, a new ‘green’ economy is rapidly emerging. 

“However, in this transition, Indigenous Peoples are facing a new wave of extractivism for transition minerals such as copper, nickel, cobalt, and lithium, which are key in battery development for electric vehicles (EVs) and other technologies.

“Indigenous lands, territories, and resources are under direct threat as the demand for these minerals increases. Indigenous Peoples also want to see an end to the climate crisis, but this needs to be achieved in a way that respects their rights.

“For decades, auto supply chains have been riddled with climate, environmental and human rights abuses. The EV transition is an opportunity to change that, but so far, it’s still business-as-usual for their supply chains, which continue to harm people and the planet.

“Automakers can stay ahead of the curve by acting now to transform their supply chains and ensure the rights of Indigenous Peoples, and all rights-holders, are respected.”

The electric vehicle (EV) revolution is accelerating as both Europe and the United States pour money into decarbonisation, which means the sector is going to remain a key driver of rare earths demand.

But EVs are far from being the only user of permanent magnets. They are ubiquitous, powering everything from hard drives to smart phones to wind turbines, another sector that is experiencing heavy government-led investment.

Don Cameron stands next to one of his flood capture projects on his Terranova Ranch in Helm, California, U.S., Jan 25, 2023. REUTERS/Mike Blake

We meet Don Cameron, a California-based farmer intentionally flooding his farm as a means to control flooding in today’s ESG Spotlight. Elsewhere, a South African lender is offering home loans to keep up with the rising demand for solar power from households.

When Cameron first intentionally flooded his central California farm in 2011, pumping excess stormwater onto his fields, fellow growers told him he was crazy. Today, California water experts see Cameron as a pioneer.

His experiment to control flooding and replenish the ground water has become a model that policy makers say others should emulate. With the drought-stricken state suddenly inundated by a series of rainstorms, California’s outdated infrastructure has let much of the stormwater drain into the Pacific Ocean.

This mimicking of nature – letting water flow across the landscape – is the most cost-effective way to manage peak flood flows, experts say, while banking the surplus for drier days. If more farmers would inundate their fields rather than divert precipitation into flood channels, that excess could seep underground and get stored for when drought conditions return.

A woman looks at a solar panel, at a factory called Ener-G-Africa, producing high-quality solar panels made by an all-women team, in Cape Town, South Africa, Feb 9, 2023. REUTERS/Esa Alexander

Meanwhile, South African lender FirstRand aims to double its home loans linked to clean energy to 2 billion rand ($109.27 million) by next year, it said, as it seeks to tap a rising demand for solar power from households amid daily power cuts.

South Africans are witnessing the worst ever power cuts in the country’s history, forcing people to scramble for alternative sources of energy. While those with money have tried to go off-grid by setting up rooftop solar systems, others are left to fend for themselves, especially as the top lenders in the country have been hesitant to open funding taps for riskier clients.

“Automakers wield a huge amount of influence and purchasing power in global supply chains. It’s time to use this leverage to shift the steel, aluminum and battery industries away from fossil-fuels and towards practices that benefit workers, Indigenous Peoples, and local communities.” 

Anna Song, steel lead at the Korean climate NGO, Solutions For Our Climate

Reuters Auto File

Joe White makes sense of the fast-paced world of automotive technology, mobility and transportation news.

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