Have synthetic fuels enough power to save ICE fleets?
Not everybody spells out the end for the internal combustion engine. Turning to synthetic fuels might throw that good old cylinder block a lifeline making it carbon-neutral after all. We answer 5 questions about what the rise of synthetic fuels, and the accompanying debate, signifies for the future of fleets. If there is one, of course...
1. What are synthetic fuels?
Synthetic fuels, also called e-fuels, electric fuels, or synfuels, are artificial versions of conventional oil products. They mimic the building blocks of fossil fuels like petrol and diesel by binding hydrogen with CO2 (captured from the surrounding atmosphere). To make them sustainable, the essential prerequisite is that the hydrogen is produced green by using renewables.
However, because of the many stages between the hydrogen production and the resulting e-fuel, the procedure is very energy-intensive and costly. In an ideal scenario, these plants are operated in regions with a lot of excess solar and wind energy, like Latin America. But as a rule, production can be based anywhere. Burning e-fuels in an ICE car is very inefficient (10-15%), whereas in electric cars, up to 80% energy efficiency is reached.
The advantages are the preservation of current filling-station infrastructure and engine technology. The latter is one of the main reasons why German sports car brand Porsche, co-owner with HIF (Highly Innovative Fuel), constructed the very first commercial e-fuel plant - one of the very few - in Chile in 2021.
Interestingly, the former head of Porsche, overseeing this strategic investment in synfuels, was Oliver Blume, now CEO of the entire Volkswagen Group. This promotion could significantly broaden the brand support for e-fuels in passenger cars shortly. As for production, larger quantities are expected as of 2023.
2. How do they comply with the European phase-out of fossil fuel cars in 2035?
In the late hours of the agreement, an important clause was added. Under pressure from Germany, the text stipulates that the European Commission must prepare a report by 2026 looking into “CO2 neutral fuels” (and plug-in hybrids).
This is on the grounds of the following passage:
- “Following consultation with stakeholders, the Commission will make a proposal for registering after 2035 vehicles running exclusively on CO2 neutral fuels in conformity with EU law, outside the scope of the fleet standards, and in conformity with the Union’s climate neutrality objective.”
This is often referred to as the ‘loophole’ or ‘backdoor’ for e-fuels as sustainable alternatives after 2035 extending the deadline for the combustion engine. A final decision has yet to be made. However, the EU wants to start blending regular and electric fuels for decarbonizing ICE cars over a few years as part of the Green Deal. Scaling will follow, and synfuels will come about as they are adopted by the air and maritime sector, which face a higher complexity switching to battery power.
The ICCT (International Council on Clean Transportation) calls the clause a “magic lollipop” to soothe German politicians and believes it will only lead to fire engines and ambulances running on e-fuels after 2035. It’s a given that, if the exception is adopted, it will be difficult to verify whether cars run on regular or synthetic fuels. But nostalgia, motor sports, sports cars and economic independence from China (as the world’s number one battery maker) all play their role.
3. Can they align with a company’s CSR policy?
Contrary to biofuels, to a high extent fabricated from edibles, there are no genuine ethical concerns regarding production. In theory, the carbon footprint of synfuels is balanced, with the entrapment of CO2 during production compensating for all the carbon-dioxide emissions during the combustion phase.
Cars running on e-fuel aren’t free from tailpipe emissions and not clean. Tests from Transport & Environment showed that while the particulate matter was much lower, carbon monoxide, ammonia and NOx were higher, or on a par, compared to conventional fuels. Especially the share of NOx bears significance since air quality concerns are the driving force behind the (U)LEZ zones in cities worldwide.
Their inefficiency doesn’t necessarily make them socially less acceptable; five times net zero is still net zero.
4. Can they result in a more beneficial TCO than electricity?
The cost of the complex production process, the considerable energy losses and the small scale of current production trials make e-fuels far from cheap. As a result, they are sometimes called the ‘champagne of the energy transition'. However, according to the eFuel Alliance a price fork between 4 to 10 euros per litre, as often propagated, is a ‘myth’ The organization claims a price between 1 to 2 euros per litre which correspond to regular oil products.
This means electric cars would still have the edge on TCO. Bosch, however, has calculated that, up to a lifetime mileage of 160,000 kilometres, the total cost of ownership of a hybrid running on synthetic fuel could be less than that of a long-range electric car, depending on the type of renewable energy used. This remains premature, as both battery technology and synfuel commercialization are still young fruit. A lot can happen in ten years.
As a prospect the eFuel Alliance, as does Bosch, claim that the price will hover around (or drop below) 1 euro per litre by the end of the decade. That would positively impact TCO. But predicting electricity cost will become very challenging and it is the primary price influencer for efuel production, so these calculations remain assumptions.
5. Are LCV fleets better suited for synthetic fuels?
Though commercial vehicles serve different needs in fleets and e-fuels are better suited for heavier and goods transportation, they are likely to follow the same technology path as passenger cars. Even though e-fuels could significantly improve downtime over battery-powered vans.
For that matter, EU vice-president Frans Timmermans is preparing a plan to make the electrification of vans mandatory as of 2027 in the EU.
Consensus has it that a widespread market introduction for e-fuels isn’t exactly around the corner in Europe due to poor efficiency, lack of industrial scale, toxic emissions during combustion and complex production. As a turnkey solution for car fleets, the European Commission will have to decide within a few years, but the odds aren’t great. If these fleets are active in heavy-duty logistics, the scenario is much more probable. But rest assured, even car makers claiming to be EV-only by 2030 are closely watching these fuels, if only as a solution for outside of Europe.
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