Synthetic fuels, also known as E-fuels, are produced by combining CO2 with hydrogen and can be used in conventional combustion engines. When produced with ‘green hydrogen’, they have the potential to reduce carbon emissions. However, several factors need consideration when comparing them to EVs.
Cost: According to the Intergovernmental Panel on Climate Change (IPCC), E-fuels are “up to three times more expensive than conventional fossil fuels.” They require as much as five times the electricity to produce compared to the amount used for EVs.
Lifecycle emissions: Transport & Environment calculated that by 2030, the lifecycle emissions from an EV would be 53% lower than those from a combustion-engine car powered by synthetic fuels.
Focus of adoption: The IPCC suggests that due to their high costs and limited scale, the adoption of synthetic fuels will likely focus on segments such as aviation, shipping, and long-distance road transport, where decarbonization by electrification is more challenging.
In 2023, German automakers lobbied the EU during consultations for a 2035 ban on the sale of combustion cars. They insisted on an exemption for cars running on E-fuels, aiming for legislative intervention to continue building internal combustion engines (ICE) that could run on synthetic and liquid fuels.
The International Council on Clean Transportation (ICCT) estimates that currently, E-fuels could cost around 40% more than petrol and diesel, potentially resulting in a pump price of £2.50 a litre. Transport & Environment further calculated that filling a 75-litre fuel tank with synthetic fuels could cost up to £200.
While there is an argument that E-fuels could help partly decarbonize the existing combustion car fleet without consumers having to switch to a more expensive EV, their high cost remains a significant barrier. Until E-fuel prices decrease, this option appears to be expensive and only partially a low-carbon solution.