At $10 a litre, E-Petrol just saved ICE cars in the EU. What are E-Fuels and how are they made?

At $10 a litre, E-Petrol just saved ICE cars in the EU. What are E-Fuels and how are they made?

E-Fuels, electrofuels, or synthetic fuels, have proven to be vital in saving ICE cars from extinction. But at $40 a gallon, they are almost 10X the price of regular petrol and diesel. We take a look at what are E-Fuels and how are they made.

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At $10 a litre, E-Petrol just saved ICE cars in the EU. What are E-Fuels and how are they made?

The proposal in the EU to completely ban ICE cars by 2035 was amended at the last minute, to allow carmakers to continue to sell ICE cars beyond 2035, as long as they are selling E-Fuels. This amendment was made mainly because of the lobbying efforts of Germany, Italy, Poland and a couple of other countries.

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The stipulation is, that regular petrol and diesel engine cars will be banned from being sold after 2035. However, the ICE will be able to live on, if they are made to run on E-Fuels, or zero carbon fuels.  

At $40 a gallon or about $10.66 a litre, today’s E-Fuel, or synthetic petrol is a very expensive proposition, almost 10 times the cost of regular petrol. However, it is what has saved the ICE for years to come.  

Here’s everything that you need to know about synthetic petrol or E-Fuels

What are E-FUELS and how are they made? E-Fuels, also known as synthetic fuels, electrofuels or power-to-liquid fuels, are made by combining carbon dioxide and hydrogen from renewable sources such as water and wind power. The process involves several steps.

First, there is electrolysis, in which water is split into hydrogen and oxygen using electricity from renewable sources such as wind and solar power.

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Next up, there is carbon capture. Carbon dioxide is captured from industrial processes or directly from the air.

Then, there is the synthesising process. Hydrogen and carbon dioxide are combined using a chemical reaction to create a liquid fuel. The exact process can vary depending on the desired fuel, but generally involves using a catalyst to convert the gases into liquid form.

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The resulting E-Fuels can be used as a drop-in replacement for conventional fossil fuels in existing engines and infrastructure, making them a promising solution for reducing greenhouse gas emissions in the transportation sector. However, the process of creating EFuels is energy-intensive and currently more expensive than conventional fuels, so further research and development are needed to make them a viable commercial alternative.

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The goal, however, is for the amount of CO2 emitted during use to be offset by the amount of CO2 removed from the atmosphere during the fuel production process, making the overall impact of E-fuels CO2-neutral.

E-fuels do produce CO2 when they are burned in an internal combustion engine, but the concept is that these emissions are equal to the CO2 removed from the atmosphere to make the E-Fuel.

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Production needs to ramp up Most major car manufacturers are investing in battery-electric vehicles as the primary means of reducing CO2 emissions from passenger cars, a technology that is already widely available. However, suppliers, oil majors, and several carmakers argue in favour of E-Fuels since they don’t want their vehicles to be weighed down by heavy batteries.

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E-fuels are not yet produced at scale. The first commercial plant, backed by Porsche and aiming to produce 550 million litres per year, opened in Chile in 2021. Norsk E-Fuel in Norway is another planned plant scheduled to begin production in 2024, with a focus on aviation fuel.

Arguments for E-fuels  Supporters of E-Fuels argue that they offer a way to reduce CO2 emissions from existing internal combustion engine vehicles without the need to replace every vehicle with an electric one.  

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They also argue that E-Fuels can be used in existing ICE vehicles and transported via existing fossil fuel logistics networks, which is good news for ICE component makers and companies that transport petrol and diesel.  

Some carmakers and suppliers also argue that E-Fuels are a more practical solution for certain applications, such as heavy-duty transportation, where battery electric vehicles may not be feasible due to their weight and range limitations.  

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Finally, E-Fuels can help support the growth of renewable energy by providing a market for excess renewable electricity that would otherwise go to waste.

Some policymakers however argue that E-Fuels should be reserved for hard-to-decarbonize sectors like shipping and aviation, which cannot easily operate on electric batteries, unlike passenger cars.

Arguments against E-Fuels Critics note that the production of E-Fuels is very expensive. Using E-Fuels in an ICE car requires approximately five times more renewable electricity than operating a battery-electric vehicle, according to a 2021 study published in the Nature Climate Change journal.

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A major argument against E-Fuels is that their production requires significant amounts of energy, typically from renewable sources, which could be used directly to power electric vehicles or other more efficient uses. This means that e-fuels may not be the most efficient or cost-effective way to decarbonize transport, especially if the electricity used to produce them could be used directly in battery-electric vehicles.    

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There are also concerns that E-Fuels could serve as a distraction from more immediate and effective solutions for decarbonizing transport, such as increasing the deployment of battery-electric and hydrogen fuel cell vehicles, investing in public transport and active travel, and reducing the need for transport through urban planning and telecommuting.

What do carmakers want Big auto component suppliers in Germany, such as Bosch, ZF, and Mahle, are members of the E-Fuel Alliance, an industry lobby group, alongside oil and gas majors like ExxonMobil and Repsol.

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Carmakers like Piech, Porsche, and Mazda generally support the E-Fuel technology. Porsche holds a stake in E-fuel producer HIF Global.

BMW has invested $12.5 million in E-fuel startup Prometheus Fuels, while also investing billions in battery-electric technology.

Other carmakers, such as Volkswagen and Mercedes-Benz, are betting on battery-electric vehicles to decarbonize. Volvo and Ford recently urged EU countries not to backtrack on the 2035 phaseout of new petrol and diesel cars.

When will E-fuels become available? While Porsche has started industrial production of synthetic fuels in Chile through its stakeholder, Highly Innovative Fuels, mass industrial production of E-Fuel is not expected to begin before 2025. Porsche has committed to both e-mobility and E-fuels as complementary technologies.  

On the other hand, Ford and Volvo have signed a letter stating that EU businesses need legislative clarity to support their long-term plans to transition to electric vehicles. They argue that allowing the sale of petrol and diesel cars after 2035, even if powered by E-fuels, would have negative consequences for the environment and air quality.

Once they go mainstream prices for E-Fuels will drop drastically from $10+ a litre to costs at current levels

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