The German support for e-fuels in new cars could leave the average German driver paying €210 to fill up their tank, a new analysis by NGO Transport & Environment (T&E) shows.

The German Chancellor Olaf Scholz is in a stand-off with the EU over his insistence that cars powered by e-fuel can be sold after a 2035 phase-out date for combustion engines. “The exorbitant cost would mean only wealthy drivers could afford synthetic fuel – while pushing some drivers who purchase combustion engines certified as running on e-fuels to circumvent the rules and buy fossil gasoline instead,” says T&E.

Expensive e-fuels

E-petrol could cost more than €2,80 per liter at the pump in Germany in 2030, says T&E, 50% more expensive than regular gasoline today due to the complex and energy-intensive production process. This would cost the average driver at least €2 300 a year to fill up his car with synthetic gasoline, the analysis by Transport & Environment (T&E) finds.

E-fuels, or synthetic gasoline and diesel, can be made from hydrogen and CO₂. Even though the fuel is burned in engines, so releases similar CO₂ and pollution as conventional cars, provided Direct Air Capture technology is used to capture CO₂ from the air (not yet commercial). The CO₂ captured from the air can neutralize the CO₂ burnt (but not other polluting elements).

“These synthetic fuels have, since at least 2017, been pushed by the oil lobby in an attempt to derail the switch to clean electric motors,” says T&E. Alex Keynes, clean vehicles manager at T&E: “Chancellor Scholz is threatening to pull the rug from under the European Green Deal for the sake of saving polluting combustion engines. Unfortunately, the higher cost of e-fuels will mean that only the wealthy can afford them. At the same time, everyone else could be pushed into getting around the rules and using fossil gasoline instead. Motorists and the climate will be the losers.”

Other pollutants

Creating a loophole for e-fuels would also condemn Europeans to breathe toxic air for decades. While synthetic fuels can be carbon neutral, they still emit air pollutants, notably toxic NO2 and carcinogenic particles, when burned in combustion engines. “Cars running on e-fuels could emit up to 160 000 tons of additional NOx pollution in the EU by 2050 – more toxic emissions than from Italy’s car fleet in an entire year,” T&E warns.

Alex Keynes again: “Ultimately, e-fuels will be no more than a niche solution for Porsche drivers (Porsche being a big supporter of e-fuels, editors note). But by undermining the clarity of the engine phase-out for the sake of expensive and polluting fuel, Scholz is risking Europe’s green transition and the future of its car industry.”

Green EU policies threatened

The EU Commission is currently negotiating with Germany over a loophole for e-fuels in the 2035 phase-out of combustion engines. T&E says that Scholz’s drive for synthetic fuels undermines investment certainty in the electrification of European carmakers and is putting up to €30 billion of battery plant investments in Germany alone at risk.

“Germany’s push to power new cars with scarce e-fuels would also increase CO2 emissions and oil consumption from the existing car fleet,” T&E warns. “Allowing combustion engines to be sold after 2035 would displace sales of up to 46 million zero-emission electric cars by 2050 while depriving existing cars of the synthetic fuel they need to decarbonize.”

If e-gasoline is used in new cars, vehicles already on the road would burn an additional 135 billion liters of fossil gasoline and emit an extra 320 MtCO2e by 2050 than if e-gasoline was available for the existing fleet, T&E claims.

Not all automotive CEOs are on the same line

Italy and Germany are the prominent EU members leading the opposition against the formerly agreed ICE ban in Europe as of 2035. One should expect the entire car industry to support them, but that’s wishful thinking from the opposers.

Inside the VW Group, for example, we see already opposite views. As already known, Porsche is one of the foremost advocates of e-fuels and has started a pilot project for producing them in Chili. Audi CEO Markus Duesmann, on the contrary, talking to the German newspaper Handelsblatt, says that “whoever develops the last combustion engine will have to spend a great deal of money”.

And he certainly is not budging from the brand’s decision to phase out internal combustion engines. “We made a consistent decision to switch to e-mobility in 2021. And we are finding that the world is turning faster than we thought. In important markets like China, we see a rapid change: by 2025, at the latest 2026, electric cars are expected to overtake sales of combustion cars,” claims Duesmann.

Talking to Politico magazine, Renault Group CEO Luca de Meo warns Germany: “Car engines are dying. The future is electric.” Luca de Meo, the current chair of the European Automobile Manufacturers’ Association (ACEA), said carmakers had already responded to EU plans to mandate a zero-emission sales policy for cars and vans from 2035  by funneling billions of euros into clean vehicle technology.

“I don’t think anybody is still developing a completely new ICE engine in Europe,” said de Meo.  “All the money is going to electric or hydrogen technology.” While some carmakers, including Renault, were initially keen to delay the 2035 phase-out date, most have already announced plans to switch to all-electric sales in Europe by 2030.

Threatening EU war

Meanwhile, the issue is threatening to turn into an all-out war. Italy has expanded on the German government’s demands by asking the Commission to prepare a detailed workaround for sales of cars running on all carbon-neutral fuels, including e-fuels and certain kinds of biofuels.

In an address to lawmakers in parliament in Rome, Prime Minister Giorgia Meloni argued Tuesday that the 2035 ban was “too ideological” and warned that efforts to green up the national economy would “bring us straight to deindustrialization.”

But France and other EU members have said they want to stick to the original 2035 deal, as has the European Commission, which declared Tuesday it would not reopen the green cars legislation agreed upon last year. To be continued.