Can e-fuels put plans to end ICE vehicles on ice?

Despite the proposed sustainability of e-fuels, they will find very limited use in production-ready road cars and will occupy a very small niche.

In a recent development following overtures made by the German automotive industry, the European Union has decided to exempt internal combustion engines (ICEs) from the 2035 ban on fossil-fuel driven vehicles. The caveat? They must run exclusively on e-fuels. So what does this mean for some of Germany’s most storied performance cars and, as a corollary, what does this mean for petrolheads all around the world? Are e-fuels truly carbon-neutral? Can they provide the analogue driving thrills that are unique to fossil-fuel-powered cars?

What are e-fuels?

E-fuels are essentially fuels produced from renewable sources of energy like solar, wind, etc., or decarbonised electricity. E-fuels, also known as synthetic fuels, can be created using electrolysis, splitting water into hydrogen and oxygen and then mixing hydrogen with carbon dioxide or CO2 to create an e-fuel in liquid form. This can be achieved through the Fischer-Tropsch synthesis. E-petrol, e-methanol, etc., are all examples of synthetic fuels. Hydrogen has to be produced from renewable sources, though, otherwise it defeats the point. But e-fuels do produce CO2 and aren’t entirely carbon-neutral. However, given the fact that they are created by extracting CO2 from the atmosphere, the CO2 production is offset to a large extent.

Much like the fossil fuels we currently use, e-fuels carry the same infrastructural advantages. They can be easily transported, and conventional ICE vehicles can be adapted to use them. According to the eFuel Alliance—a Brussels-based advocacy group for the fuels—the climate neutrality of e-fuels is derived from the fact that they emit only as much CO2 as they extract from the atmosphere during the production process, which uses renewable energy.

Where will e-fuels be used?

Extending the timeframe for the use of e-fuels would come as good news for several stakeholders in the current automotive ecosystem. For starters, transporting e-fuels (which can be done at room temperature) requires the same logistical network as the one being used currently. It would also mean the continued use of the same advanced ICEs that brands have poured several hundreds of millions of dollars into developing. While e-fuels will find widespread usage in the maritime and air transport sectors, when it comes to cars their use will be relatively niche. Carmakers like Porsche, who’ve built their brand perfecting one sports car—the 911—are particularly keen on the e-fuel exemption from the fossil fuel ban as it would allow them to use proprietary internal combustion powertrains beyond 2035. The EU ban on internal combustion cars, which is effective from 2035, would effectively threaten the jobs of millions of people currently employed in the production of multiple automotive components, in fuel transportation and other ancillary industries, to say nothing of the technicians and engineers. The use of e-fuels could circumvent a larger part of that.

Not surprisingly, the world of international motorsport is particularly keen on the use of e-fuels, particularly Formula One. According to the FIA, the umbrella body of motoring organisations including racing events, Formula One is pioneering the use of a 100 percent sustainable fuel that will not only be used in F1 cars from 2026 but also several road cars across the world. Formula One managing director Ross Brawn has said, “We’re working on an e-fuel where the carbon circle is completely neutral so the carbon utilised to produce that fuel is the same quantity as the carbon emitted from the internal combustion engine.” Given Formula One’s history of pioneering technology that is then passed on to road cars (for example, F1’s kinetic energy recovery system, paddle shifters, etc.), Brawn also said that “when we find this solution, you can use it in your road car without making any changes to the engine”.

Roadblocks

Despite the proposed sustainability of e-fuels, they will find very limited use in production-ready road cars and will occupy a very small niche. This is because e-fuels will largely find use in high-performance sports cars, since it's the makers of those cars that are lobbying for its use. It’s not just Porsche, Ferrari too has been outspoken in its defence of the ICE, claiming it to be a part of the brand’s heritage. This means e-fuels are unlikely to become a large-scale alternative to battery electric vehicles, which will dominate the automotive landscape come 2035.

E-fuels are also accused of being grossly energy inefficient when compared to battery electrics and hydrogen fuel cell electrics. According to Euro News, up to 70 percent of e-fuel’s energy is lost during combustion and 48 percent of the renewable electricity used to convert e-fuels into liquid is lost in the process. In comparison, battery electrics are a lot more energy efficient, and only lose 20 percent of the electricity via the motor. A study by Brussels-based NGO called Transport & Environment said that a battery electric car could travel five to six times the distance on the same renewable electricity used to power an e-petrol vehicle.

Many critics are also questioning e-fuels’ claims towards carbon-neutrality since, as per EU laws, emissions are calculated based on tailpipe emissions and not based on the emissions generated during the production of the fuel.

Why e-fuels could work

Brawn does have a point when he says, “We will have close to 2 billion internal combustion engines on the planet and whatever electric solution we find, whatever hydrogen solution we find, there’s still going to be two billion cars.” And present-day fossil-fuel-driven powertrains can be irrevocably converted to run on e-fuels alone. A device known as a “fuelling inducement system” would prevent users from filling up the vehicle with conventional fossil fuels like petrol and diesel. This would also allow people to hold on to their ICE vehicles for a little longer and ease their transition to EVs or electric vehicles.

Can e-fuels come to India?

At present, there is no ecosystem to manufacture e-fuels at scale here. This means that if and when it comes into play, e-fuel will be used almost exclusively by high-powered luxury performance cars. Among the brands that have placed bets on e-fuel startups are Porsche, having invested $75 million in HIF Globsal LLC and BMW, which has invested $12.5 million in California-based Prometheus Fuels. However, the amount is wildly disproportionate when compared to the billions German carmakers have invested in battery electrics. Given that e-fuel will cost 50 percent more than conventional petrol or diesel, it is also likely to prove a huge deterrent in a price-sensitive market like India.

Given that EV market penetration will be less than 30 percent by 2027, it’s safe to assume that fossil fuel vehicles will continue to ply on Indian roads, beyond 2035. India’s attempt to reduce its oil import bill is, at present, defined by its focus on biofuels or flex fuels, which will use organic agricultural produce to create bioethanol. As of early 2023, E20 fuel—petrol containing blended with 20 percent ethanol—has already been introduced in 11 states across the country, with manufacturers already working on flex fuel prototypes.