E-Fuels: Theoretically great

E-fuels just make sense. At least that’s the view of Uniti, the German association of small- and medium-sized mineral oil companies – an industry more used to doing business in fossil fuels. On its website (www.e-fuels.de), the association provides information on synthetic fuels and seeks to clear up some common prejudices and misconceptions. The mineral oil lobby sees hydrogen-based e-fuels as a vital part of the fight against climate change. These fuels are manufactured exclusively from renewable energy sources, after all. The key advantage of the technology, however, is that e-fuels can work with existing engines and filling stations. Instead of facing the scrap heap, millions of trucks could remain on the road and become carbon-neutral at the same time. What's more, the necessary infrastructure is already in place, so there's no need to build a single new gas station. This makes the technology both climate-neutral and sustainable in other respects, too.

The point that continues to be made – including by VDE – is that synthetic fuels are considerably less efficient than battery-driven electric vehicles, but Uniti's managing director, Emar Kühn, has a counter-argument: “Conventional efficiency analyses fail to take into account location-specific factors in the generation of renewable energy and the resulting yield efficiency of renewable power generation,” he recently told VDE dialog. To put it another way, it doesn’t matter how much energy is consumed to make e-fuels if they are produced in countries where the supply of renewables like sun and wind is virtually unlimited. Whereas power for charging electric vehicles needs to be generated close to where it will be used (due to the problem of storage and transmission), e-fuels can also be produced in Africa or South America and shipped to Europe. If the tankers are also powered by e-fuels, even the corresponding transport is climate-neutral. A perfect solution, you might think.

Technology openness does not mean indecision 

Meanwhile, Kühn makes it clear that he isn't opposed to battery-powered cars and trucks; he's advocating an approach that includes both technologies. “If we want to achieve our climate targets, we're going to have to rely on every sustainable solution available for road transport.” It's a remark that could have come from German transport minister Volker Wissing or finance minister Christian Lindner, both of the Free Democratic Party (FDP). In Brussels this past March, both men called for the looming 2035 ban on new combustion-engine vehicles to be watered down to allow the use of synthetic fuels. They are also seeking exceptions to the planned 2040 ban on combustion engine trucks. “Technology openness” is their refrain, meaning that the market should decide which technology ultimately prevails.

In this context, many experts are critical of that approach. While there are good arguments against becoming tied to a particular technology too early – the valuable effects of competition, for instance, or the risk of backing the wrong horse and being left behind – new technology requires funding, and infrastructure needs to be built to serve it. Countries can't afford to pursue too many different solutions and support every option that promises to make climate-neutral road transport possible. “Of course, one has to be open-minded and look very closely at the different technological options,” says Prof. Dr. Martin Wietschel, who heads the Competence Center Energy Technology and Energy Systems at Fraunhofer ISI. “At some point, though, there’s no getting around making a decision.”

The experts at Fraunhofer are up to speed on the subject, as well, having recently put e-fuels under their microscopes. In April of this year, the members of Wietschel's team published a discussion paper that makes their position on using synthetic fuels to power cars and trucks abundantly clear: Unlike Uniti, they believe e-fuels don't make sense, and put forward several arguments as to why. For example, it’s not apparent to Fraunhofer ISI that burning these fuels is really as emission-free as promised (“The research on this has simply not yet been done”). Above all, however, the experts are convinced that e-fuels are simply uncompetitive given the significantly cheaper alternatives for powering both cars and trucks. “Energy costs are the decisive factor here,” says Wietschel. “They're much more important than the cost of buying a truck. A truck pays for itself very quickly given the long distances it usually covers each year.”

Energy costs outweigh the cost of vehicles

To Wietschel and his colleagues, it also seems questionable to rely on unlimited quantities of renewable energy from places like Namibia or Chile when these countries still depend on fossil fuels from their neighbors. “If we really want to protect the climate all around the world, we should first help these countries transform their own energy supply," says Wietschel. Exporting energy would be a second useful step, but one that would take a very long time to implement.

This point has been addressed by the Potsdam Institute for Climate Impact Research, whose recent paper on e-fuels presents some sobering findings. While some 60 new e-fuel projects have been announced for the period between now and 2035, the expected volume of synthetic fuel is so small that the study’s authors believe it should be saved for those sectors that need it most urgently: aviation, shipping and the chemical industry. Road transport can rely on e-mobility, but these three sectors have no alternative means of becoming climate-neutral.Even here, however, it's important to be realistic, as one of the paper’s co-authors points out. “Let’s assume all these projects are realized and also – purely hypothetically – that Germany secures the entire global supply. That would be enough to replace around 10% of the liquid fossil hydrocarbons in those three sectors in Germany,” reveals Dr. Falko Ueckerdt.

Vital for climate protection – but not in cars and trucks

In fact, we are so far from beginning to meet the demand for synthetic fuels that even an extremely ambitious effort to ramp up e-fuel projects (which is urgently needed and highly recommended by the researchers) would not suffice. It would therefore be reckless to stimulate further demand for e-fuels when we already know full well that the necessary volumes are unachievable and needed elsewhere. “E-fuels are vital for climate protection,” says Ueckerdt, “just not in cars and trucks.”

And where does VDE stand in this debate? “At most, it’s conceivable that e-fuels will remain relevant for a niche market of existing vehicles with internal combustion engines – particularly where enthusiasts are prepared to pay a great deal to drive vintage or sports cars, for example,” says Dr. Ralf Petri, head of VDE Mobility. There's a lot to be positive about when it comes to e-fuels. However, batteries and fuel cells are the future in commercial freight and heavy-duty transport, as the VDE study on the drive portfolio of the future already made clear back in 2021. Petri sees those clinging to the idea of using synthetic fuels in new road vehicles as strategically motivated. “This is probably less about wanting to make a real contribution to better climate protection and more about preserving the combustion engine infrastructure so as not to give up a flourishing business model.”