Why climate goals are only attainable with e-fuels

The German automotive industry is committed to the Paris climate protection targets for 2050. The common goal of making transport climate-neutral by 2050 can only be achieved if sustainable, renewable fuels, such as hydrogen, e-fuels produced with renewable energies, and advanced biofuels, are used in the transport sector in addition to electromobility using green electricity.

We will still have many vehicles with combustion engines on the road in 2030 – around 1.5 billion worldwide – with some 421 million in Europe alone. In many regions, there will not be enough electricity for e-cars and charging options for some time to come. Which is why e-fuels from sustainable sources such as solar and wind power are suitable for enabling climate-neutral mobility. Climate neutrality is not achievable without including the status quo. As part of the "Fit for 55” package, the VDA is advocating a quota of 30% renewable fuels in 2030, in addition to supporting measures for the ramp-up of electromobility. This would create an international market that makes renewable energies from other regions of the world available for mobility in Europe. In this way, it is possible to ensure that vehicles already being built today can also make their contribution to climate neutrality. The new European climate protection targets can only be achieved if electromobility and renewable fuels complement each other – the overarching climate target of 2030 cannot be met by restricting ourselves to just one of the two pillars. There is sufficient renewable energy available worldwide. Rapidly establishing global facilities for the production of e-fuels can make a valuable contribution to achieving the climate targets.

This is why renewable hydrogen and regenerative fuels will not slow down the ramp-up of electromobility. In fact, the very opposite is true: Hydrogen and regenerative fuels supplement electromobility, also from a global perspective, precisely where battery-electric solutions face challenges. Both solutions are thus complementary for a climate-neutral transport system, increase the technological scope for action as well as the social acceptance of efforts to make transport climate-neutral in the long term, especially in emerging and developing countries. The VDA is committed to accelerating the ramp-up of electromobility. However, regenerative fuels are the only way to address the current existing fleet and thus contribute to immediate CO₂ reductions in road transport. The repeated argument that hydrogen and e-fuels should be used primarily in energy-intensive industry and in aviation and shipping falls short: Only road-based transport will guarantee the significant volumes in the medium term (2025/2030) needed to justify the necessary investments. Every single long-distance truck powered by hydrogen will require around ten tons of the fuel per year. While the manufacturers, in turn, will be obliged by European CO₂ regulations to sell substantial numbers of CO₂-neutral vehicles.

A study conducted by the German Energy Agency (dena) and Ludwig-Bölkow-Systemtechnik (LBST) on behalf of the VDA sheds much light on what this scenario could look like in 2050. According to the study, more than 70% of the final energy demand of all transport modes in the EU will be met by e-fuels in 2050. The largest share will be accounted for by air, sea, and road freight transport. However, this will require a major expansion of renewable energies in Europe.

Expanding renewable energy as quickly as possible is an important element of any strategy for a climate-neutral transportation sector. By using surplus electricity for hydrogen production, power-to-X technology supports sector coupling as an electricity storage system. Due to the limited availability of renewable energy production in Europe, even in the long term, an energy carrier that can be stored and transported represents an important building block for securing supplies. Therefore, these energy carriers will soon be imported, as it is usually more economical to produce hydrogen and e-fuels in regions with much lower electricity production costs. Many potential producing countries (such as North Africa, South America, the Middle East) are waiting in the wings. The major advantage of hydrogen and e-fuels is that they are currently the only way to store renewable energy on a large scale and transport it over long distances. This is where synergies between climate and development policies can emerge. To launch such investments, the right conditions are needed to create long-term market demand.

The potential for hydrogen and e-fuels to reduce CO₂ depends heavily on the electricity mix used for their production. In the case of production abroad, additional plants for renewable energy can be assumed – guaranteeing the use of green electricity. The EU further stipulates in REDII that such fuels must reduce CO₂ by at least 70%. The VDA advocates the exclusive use of renewable energy sources. The assumption of certain studies that hydrogen or e-fuels are produced from the national electricity mix contradicts regulatory EU requirements and is economically nonsensical, since fossil fuel production costs are too high in the long term. To put this into perspective, the German Federal Institute for Agriculture and Food has stated that biofuels reduce CO₂ by 84% compared to fossil fuels. In 2018 road transport emitted 9.5 million tons less CO₂ using biofuels.