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The European Union’s (EU) decision to phase out the sale of new petrol and diesel cars by 2035 marks a significant step in combating climate change and transitioning towards cleaner transportation. However, after nearly two years of negotiations, Germany’s Minister of Transport raised objections just as the agreement was nearing finalization. The Germans proposed amending the law to allow the sale of internal combustion engine (ICE) cars beyond 2035, provided hydrogen-derived e-fuels powered them. On Saturday, March 25th, the European Commission (EC) and Germany reached an agreement to permit the sale of combustion engine vehicles fueled by E-fuels post the 2035 ban, and “vehicles with internal combustion engines can still be newly registered after 2035 if they fill up exclusively with CO2-neutral fuels.”, German Transport Minister Volker Wissing announced on Twitter.
However, as we will see, while synthetic fuels in theory could offer a lifeline to ICE vehicles, it is clear they are currently far from a perfectly sustainable solution.
What are e-fuels?
E-fuels are produced by combining hydrogen extracted from water and carbon from the air, resulting in a synthetic, storable, and transportable liquid fuel. These artificially created fuels mimic the properties of fossil fuels and are suitable for use in various modes of transportation, including conventional aircraft, maritime vessels, trucks, and cars. Moreover, e-fuels can seamlessly integrate into existing distribution networks and fueling stations. However, they must be manufactured using hydrogen generated from renewable electricity and carbon dioxide captured from the atmosphere to qualify as carbon neutral.
So who is making e-fuels?
According to the International Energy Agency (IEA), over 200 low-emission e-fuel projects are currently in progress worldwide. However, the majority of them are only at a start-up stage. Porsche, the German car manufacturer, has invested more than USD 100 million in developing and producing e-fuels. Located in Chile, the Haru Oni project, the world’s first integrated pilot plant for the production of synthetic, potentially near-carbon-neutral fuels opened in 2022 and was a joint venture by Porsche and the Chilean company HIF Global (Highly Innovative Fuels). The company plans to scale up production so the e-fuels produced can also be generated for use in air travel, shipping or heavy goods transport. Norway’s Norsk e-Fuel aims to establish what could be the world’s first large-scale production facility for electro fuel. Electro-fuel, also known as e-fuel, is a fossil-free aviation fuel compatible with current aircraft and will be produced at a plant in Mosjøen in Nordland for the aviation sector and it is expected to produce e-Fuel from renewable electricity as early in 2026.
The downside?
The cost of e-fuels is likely to be a major deterrent, for now. According to a study by Transport & Environment (T&E), a prominent European environmental organization dedicated to promoting sustainable transport policies, E-petrol could potentially cost 50% more than regular petrol today by 2030 due to its complex and energy-intensive production methods. This would mean an annual expenditure of at least €2,300 for the average driver to refuel their vehicle. The Brussels based think-tank also cautions that despite the potential carbon neutrality of synthetic fuels, they still release harmful air pollutants, particularly toxic NO2 and carcinogenic particles. In fact, E-petrol cars would be regarded as CO2 neutral, yet they would still emit approximately five times more CO2 emissions than comparable electric vehicle (EV) models. According to their analysis, vehicles powered by e-fuels could contribute up to 160,000 tonnes of additional NOx pollution in the EU by 2050—exceeding the toxic emissions from Italy’s entire car fleet in a single year. In contrast to emission-free electric cars, e-petrol and e-diesel vehicles will do little to reduce air pollution.
Finally, e-fuels are also incredibly energy intensive. According to the International Council on Clean Transportation, multiple studies indicate that 70% of the energy contained in e-fuels is lost during combustion in internal combustion engines, resulting in an overall efficiency of 16% for the e-fuels pathway. Consequently, a significant portion of the energy derived from solar or wind sources is wasted. In contrast, in electric vehicles, only 10% of total energy is lost during charging and 20% is lost by the motor, resulting in an overall efficiency of 72%. Powering a car via e-fuels is therefore a far more inefficient and costly process due to the extra renewable energy that will be required, such as the additional solar panels and wind turbines to power a car with e-fuels compared to a battery electric car.
Are they a lifeline for ICE vehicles?
In short, no. At least not at the moment. While e-fuels might find a niche in industries like aviation, their viability as a sustainable option for internal combustion engine (ICE) cars remains doubtful. The economic and efficiency considerations suggest that battery electric vehicles are a more practical option for current and future transportation needs. While improvements in efficiency and cost reductions may occur over time, the future of e-fuels likely resides in fueling airplanes and possibly classic cars. For now, battery electric vehicles remain the most efficient choice for personal transportation.
References:
International Energy Agency – https://iea.blob.core.windows.net/assets/a24ed363-523f-421b-b34f-0df6a58b2e12/TheRoleofE-fuelsinDecarbonisingTransport.pdf
transport and environment – https://www.transportenvironment.org/discover/over-e200-to-fill-up-a-car-the-cost-of-germanys-bid-to-keep-combustion-engines/