Germany pushed and after heavy lobbying was able to get what it wanted: after 2035, it will still be possible to sell cars with internal combustion engines in Europe, but on synthetic fuel. Why was Germany so persistent? What is this “e-fuel”? Why will they remain a niche, even though billions will be invested in them?

The car industry is on its way to one of the biggest changes in its history, as from 2035 only new electric cars can be sold in the EU. However, there is an exception that intervened after weeks of negotiations at the insistence of Germany. The Germans want to create a new category of cars that run on ecological fuel, and they managed to prove themselves.

Proponents of synthetic fuel say it has many advantages, but the question is, why aren’t millions of cars running on “e-fuel” if it’s so great? The answer is mainly related to production costs and the fact that there is no very large production capacity. Currently, the price of these types of fuel is at least twice as high as gasoline.

• Brussels succumbed to Germany: which cars with a heat engine can still be sold after 2035

The production of this synthetic fuel requires a huge amount of electricity from renewable sources, which is difficult to obtain. High production costs also mean high costs at the pump in Europe, where things have gone up a lot in the last year.

Why Germany does NOT want the heat engine to die

The Berlin government lobbied hard, blocked a previously agreed proposal and secured a last-minute amendment that would allow new cars with internal combustion engines to continue to be sold after 2035. But these cars will have to use synthetic fuel, which is also called e-fuel (electric fuel).

Why did the Germans insist so much? The reasons are both economic and political. All-electric cars have fewer components, fewer people in factories, and fewer component suppliers. Various studies have shown – as recently as 6-7 years ago – that hundreds of thousands of people will no longer have jobs in the German automotive industry if it goes full electrification.

• The European Parliament has approved a project that will allow the sale of only electric cars from 2035

The automotive industry is a national brand for Germany, which has developed many technologies in the field of heat engine. The most radical say that banning the heat engine in Europe is “technological suicide”, while in other regions it will continue to be used. Some German politicians say that Europe is losing a technological advantage to the Chinese and Americans because of these bans in the automotive sector.

The battery is the most expensive component of an EV, and Europe, while building a few battery factories, has and will have very little production. In Germany, many say that the auto sector’s dependence on China will grow, as millions of batteries for future electric cars will be imported from China.

• Romanians and electric cars – history in small steps and what the future will look like when sales reach tens of thousands of cars per year

Let’s not forget that in China, for several objective reasons, electric cars are produced with minimal production costs, and the Chinese stormed the European market and have big plans. Even Dacia Spring is brought from China, because if it were produced in Europe, it would be several thousand euros more expensive to sell.

Not only Germany hopes that this “e-fuel” will gain popularity and extend the “life” of cars with an internal combustion engine. Other countries with strong EU car industries also fear that more factories will close and thousands of people will lose their jobs if they stop making cars with internal combustion engines.

Why is e-fuel technology so controversial?

After 2035, it will be possible to sell cars running on synthetic fuel with a neutral CO2 balance in the EU.

But we’re talking about a controversial technology that many consider a mirage because it won’t scale due to high costs that will make large-scale use of this synthetic fuel less viable.

Many say that this “e-fuel” is a kind of “Trojan horse” of the car industry, which wants to continue the production of cars with heat engines as long as possible and delay electrification as much as possible.

The NGO Transport and Environment (T&E) estimates that a liter of fuel could cost €2.82 “at the gas station” in France in 2030, 50% more expensive than petrol today.

Environmental experts warn that the energy output of this synthetic fuel is clearly lower than that of gasoline and electricity, production is expensive, and production processes are only at the beginning, so billions of euros will still need to be invested. Even when these industrial processes are developed, the estimate is that too little fuel can be produced compared to what would be necessary to have many millions of e-fuel cars.

Generally accepted calculations indicate an unfavorable outcome for electronic fuel: for the movement of a vehicle running on synthetic fuel, 5-6 times more electricity/km is required than for a vehicle running on batteries (100% electric vehicle).

Germany is the number one economy in Europe, but it needs oil and gas imports to run the “engine”.

Synthetic fuels have many obstacles ahead of them

Simply put, synthetic fuel is made by extracting hydrogen from water and combining it with carbon dioxide to create fuel. Both methods are based on the so-called “Fischer-Tropsch synthesis,” a process developed by two German chemists nearly a century ago.

Syngas is called the backbone of renewable fuels: it is a combination of hydrogen and carbon monoxide, and through a process called gasification, it is transformed into an environmentally friendly liquid fuel designed to replace modern fossil fuels.

Electric fuel or “e-fuel” burns like petroleum-based gasoline, but without greenhouse gas emissions. An example of an electronic fuel is synthetic methanol, a gasoline produced using green hydrogen produced by renewable energy.

Synthetic fuel technology is opposed by environmental non-governmental organizations, which consider it expensive, energy-consuming and polluting.

Even if they prove their usefulness, synthetic fuel will not play an important role in the medium term in the automotive segment, according to Markus Duesmann, head of Audi.

The head of Iveco, Gerrit Marks, also does not think that this synthetic fuel is a good way forward for the European car industry. He called these e-fuels the “champagne of the engine”, the idea being that they would only be acceptable to those who own expensive cars like Ferraris and Porsches, drive them quite infrequently and don’t care that the fuel will more expensive than gasoline. In principle, like champagne, if you don’t drink too often, it’s okay that a bottle is much more expensive than regular wine.

Such fuels are not produced in large quantities, and a recent study found that the projected global production of “electrofuels” would cover a very small fraction of demand. In order for these cars with “e-fuel” to become many, large investment projects worth billions of euros are needed. The bright side is that 2035 is still 12 years away.

Synthetic fuel can be obtained from coal, methane or biomass by various methods.

Many automotive companies are interested in the production of these fuels.

Porsche is building a clean synthetic fuel plant in Chile with Siemens Energy, as well as other projects. Germany has a tradition in chemistry, having developed many processes in this field and tested the production of synthetic fuels 80 years ago during the war.

BMW, Toyota and Stellantis have expressed interest, as has Renault, which is working with Saudi giant Aramco to develop synthetic fuel.

One conclusion is that synthetic-fuel cars will remain a niche in 2035 or 2040, with likely only expensive models from premium brands able to be sold under the exemption obtained by Germany and its allies.

Some manufacturers will be faced with a dilemma: should they keep production capacity for thermal cars and continue to develop cars, thinking that there will be customers for them after 2035? Another option would be a clear path to full electrification, a path many manufacturers are already following.

Sources: Automotive News, Reuters, AFP, Top Gear UK, Le Monde, Politico, The Guardian

Photo source: Dreamstime.com