What is E-Fuel?

6th April 2023

Electrofuel – or “e-fuel” - refers to a type of synthetic fuel that is produced from renewable energy sources (such as solar or wind power), using a process called power-to-liquid (PtL).

PtL technology involves converting electricity generated from renewable sources into hydrogen through electrolysis, which is then combined with carbon dioxide to produce a liquid fuel.

E-fuel is often considered a carbon-neutral alternative to traditional fossil fuels. This is because the carbon dioxide emitted during the combustion of e-fuel is balanced by the carbon dioxide absorbed during the production process.

Critically, e-fuel can be used in existing internal combustion engines without the need for modifications, making it a potential substitute for petrol or diesel in the transportation sector. However, the production of e-fuels is currently more expensive than traditional fossil fuels, and scaling up production to meet global demand remains a challenge.

What is the opinion of e-fuel in the UK and EU?

E-Fuel Future - MAT Foundry

The EU has shown interest in e-fuel as a potential tool to reduce greenhouse gas emissions on the road. In its 2020 "Sustainable and Smart Mobility Strategy," the EU highlighted the importance of promoting the production and use of sustainable fuels, including e-fuels.

The UK has also shown interest in e-fuel as a low-carbon gamechanger. Having set an ambitious target of achieving net-zero emissions by 2050, e-fuels are seen as a potential means to help achieve this goal. In February 2021, the UK government announced a £20 million fund to support the development of e-fuels, alongside other sustainable fuel options. The aim of the fund is to accelerate the commercialisation of e-fuels and help the UK meet its net-zero emissions target.

How do e-fuels influence the phase-out of petrol and diesel vehicles?

Both the UK and the EU have indicated that the progression of e-fuels is key to meeting sustainability objectives – and as a result, they haven’t shied away from investing in it.

However, when it comes to the phasing out of petrol and diesel vehicles in favour of sustainable equivalents, opinions between the UK and EU start to drift further apart.

The UK government has set a target to ban the sale of new petrol and diesel vehicles by 2030, as part of its efforts to reduce greenhouse gas emissions and achieve net-zero by 2050. The ban also includes hybrid vehicles, except for plug-in hybrids with a significant electric range.

The EU has a similar mandate, with a target to reduce greenhouse gas emissions from the transportation sector by at least 90% by 2050 (compared to 1990 levels). As part of this effort, the EU has announced plans to phase out the sale of new petrol and diesel cars and vans in the region.

The EU's current aim is to achieve a 100% reduction in CO2 emissions from new cars by 2035, effectively ending the sale of new petrol and diesel cars by that date.

The European Commission has drafted a plan to allow sales of new cars with internal combustion engines after 2035 if they run only on climate neutral e-fuels. This is based on the fact that – although cars running on e-fuel still produce carbon dioxide - the large amounts of CO2 absorbed during the production of synthetic fuel could equate to carbon neutrality.

However, the UK doesn’t intend to follow this lead. The UK Government’s Transport Secretary, Grant Shapps, has said that vehicles powered by e-fuel won’t be an exception to the rule. Come 2030, they will still be considered a pollutant.

So, what is the future of e-fuel?

E-Fuel Analysis - MAT Foundry

Some experts see e-fuels as a potential low-carbon option for when electric or hydrogen fuel cell technologies may not be feasible - in aviation, shipping, and heavy-duty vehicles, for example. E-fuels are also seen as a way to leverage existing infrastructure and vehicles without the need for significant modifications, which could help accelerate the transition to low-carbon transportation.

With this in mind - even if the UK doesn’t allow production of new e-fuelled vehicles after 2030 – e-fuel could still prove pivotal in cleaning up older vehicles that are still on the road.