(new: reactions to Lindner's tax proposal)

BERLIN/BRUSSELS (dpa-AFX) - Following the agreement to allow cars with combustion engines beyond 2035, German Finance Minister Christian Lindner wants to reform the taxation of motor vehicles. According to his ideas, the use of climate-friendly fuels - so-called e-fuels - should be taxed less than gasoline or diesel. "If the fuel is climate-friendly, then the taxation must be adjusted from the motor vehicle tax to the energy tax," the FDP chairman told the Deutsche Presse-Agentur on the weekend. He added that the Ministry of Finance would present a concept for this.

Lindner conceded that it would be a while before cars with e-fuels in their tanks would be driving on German roads. "But for people and the economy, it will be an important planning parameter that e-fuels are taxed more favorably than fossil fuels."

The proposal received a cautious reception from coalition partners over the weekend. The SPD called it fundamentally correct to provide an even stronger incentive for climate-friendly technology and use in the taxation of motor vehicles. "However, a coherent overall concept of relief and burdens as well as subsidy reduction must be presented in favor of all climate-friendly vehicles - not a lex e-fuels," SPD parliamentary group vice-chairman Achim Post told the Handelsblatt newspaper. For the Greens, Baden-Württemberg Finance Minister Danyal Bayaz (Greens) called for first reducing "the proliferation of ecologically harmful subsidies" before introducing a new subsidy.

Compromise with EU Commission after long wrangling

With the tax proposal, Lindner and the FDP are continuing their efforts to save the internal combustion engine. After weeks of wrangling over the future of this drive, Transport Minister Volker Wissing (FDP) had agreed on a compromise with the EU Commission on Friday evening. According to this compromise, new cars with internal combustion engines can still be registered in the EU after 2035 if they are fueled with climate-neutral fuel.

E-fuels are produced using electricity from renewable energies from water and carbon dioxide extracted from the air. Thus, unlike conventional fossil fuels such as gasoline or diesel, they do not release any additional climate-damaging gases. Due to the high electricity consumption during production and the high manufacturing costs, it is currently still unclear whether the production of cars powered by e-fuels is really worthwhile, or whether it is cheaper to rely entirely on electric cars powered by batteries.

"Pandora's box opened": Expert fears uncertainty

The German Association of the Automotive Industry nevertheless initially reacted positively to the compromise between the German government and the EU Commission on Saturday. "We need all climate-friendly technologies to achieve the EU climate targets," said VDA President Hildegard Müller.

However, auto expert Ferdinand Dudenhöffer fears uncertainty among car manufacturers, who are currently looking for the right path away from fossil fuels. "The EU Commission's less than professional approach has spurred discussion about whether it is really right to back the electric car so uncompromisingly," says the expert from the Center Automotive Research. "Pandora's box has been opened for all doubts into electric mobility." That's bad for the European auto industry, he says, "because the Chinese and U.S. will widen the gap with the European industry on the electric car due to the new investment uncertainties."

Climate activists also complain that the agreement dilutes the auto industry's "urgently needed focus on efficient electromobility." "This lazy compromise undermines climate protection in transport, and it harms Europe," says Benjamin Stephan of Greenpeace.

Compromise to be implemented by fall 2024

The compromise between the German government and the EU Commission ends a long stalemate that could also have political repercussions. The European Parliament and EU member states had actually already agreed in October that only zero-emission new cars would be allowed to be registered in the EU from 2035. Germany, however, insisted that cars fueled by e-fuels be included. At the insistence of the FDP, the German government blocked confirmation of the agreement by the EU member states at the beginning of March because it felt that the Commission's commitments were not yet sufficient.

According to Wissing, concrete procedural steps and a timetable have been bindingly fixed for the implementation of the solution now found. "We want the process to be completed by fall 2024," he said.

The final vote of all 27 EU states is now to take place next Tuesday. In addition to Germany, other countries such as Italy, Austria and Poland were originally critical of the plan. With Germany's approval, however, it is considered fairly certain that the necessary majority will be reached.

Environment Minister Lemke: "Good that this hanging game has come to an end".

German Chancellor Olaf Scholz (SPD) welcomed the compromise over the weekend. However, he also made it clear that he still considers application of the regulation to be open. "How many will make use of it and whether it will be relevant at all, no one can say."

The Green Party reacted with relief on Saturday that a compromise had finally been reached. "It's good that this hanging game has come to an end," said Environment Minister Steffi Lemke. "Anything else would have severely damaged both confidence in European procedures and Germany's reliability in terms of European policy."

However, there are fears that other EU members could follow Germany's example in the future and undo solutions already found in disputes. In this respect, it is not yet possible to foresee what long-term damage the dispute has caused in the European Union./mfi/red/mjm/tam/DP/he