E-fuels in cars: Unaffordable for drivers

E-fuels have entered the political debate on car CO₂ standards as a decarbonisation alternative to electric vehicles. To establish an up-to-date evidence base that can better inform ongoing policy discussions, T&E commissioned consultancy Ionect to assess the technical feasibility and near-term cost of e-petrol production for cars.

The study finds that producing e-petrol in 2030 would cost around €4 per litre. At the pump, this would translate into fuel prices of roughly €7 per litre, compared to less than €2 per litre for fossil petrol. At such prices, e-petrol would be unaffordable for most drivers, especially when electric mobility offers a much cheaper alternative.

Proponents of e-petrol for cars say that some e-fuel production co-products are unavoidable, and that once the aviation sector scales up e-fuels, these co-products could become cheap and widely available for road transport. Ionect’s findings challenge this narrative. The study concludes that producing e-petrol derived from aviation e-fuel co-products would actually be even more expensive than dedicated e-petrol production. Moreover, T&E estimates that any potential e-petrol co-product volume would amount to less than 3% of the fossil petrol consumed by European cars in 2035. Crucially, the study also finds that co-products from aviation e-fuel production can be avoided entirely, at a relatively modest additional production cost of around 10%. Alternatively, any co-products could be directed to the chemicals sector, including plastics.

Overall, there is no credible case for using e-petrol in cars: volumes would be minimal, they do not reduce tailpipe air pollution, and electric mobility offers a much more affordable alternative. The European Commission proposed to include a compensation mechanism for fuels in the car CO₂ regulation which would reward carmakers with lower CO₂ targets for the biofuels and e-fuels that are placed on the market by fuel suppliers. T&E strongly recommends that co-legislators delete the proposed fuel credits mechanism as it would only increase the costs of decarbonisation for both industry and drivers, and delay the inevitable transformation towards affordable electric mobility.

To find out more, download the study and briefing.