Sales of gas-powered cars, such as the Mercedes-Benz GLS 450 4Matic, are banned in the E.U. after 2035. But the engines could survive due to the e-fuel loophole.

It’s a deadline that seems far away, but isn’t. It’s the planned phase out of new combustion engine vehicles by the European Union starting in 2035.

Despite the regulation, the European Commission has agreed to propose a legal path to exempt cars that run on e-fuels from the EU’s 2035 phaseout of new combustion engine vehicles.

The European Union’s plans have been stalled for weeks by Germany’s transport ministry, which demanded an exemption for vehicles with combustion engines and e-fuels. Berlin and Brussels reached an agreement on Friday. 

For now, the two automakers that stand to benefit most are Ferrari and Porsche, both of which are planning future models to run on e-fuels. The commission will establish a new EU vehicle category for vehicles that run solely on e-fuels after E.U. member states accept the 2035 phaseout regulation.

What it means in Maranello

For Ferrari, it means the ability to maintain traditional Ferrari performance traits, while giving the automaker “greater freedom on the production scheme,” Ferrari CEO Benedetto Vigna told Reuters. Plug-in hybrids are already being manufactured by the company, while its first fully electric car is due by 2025. But being able to produce cars that run on e-fuels could help the automaker continue producing its fire-breathing sports cars that possess their own unique roar, something that’s difficult to achieve with a silent electric motor.

By 2030, Ferrari expects hybrid and completely electric vehicles to account for 80% of its model line-up, with internal combustion engines powering the remaining 20%.

Meanwhile, in Germany

Volkswagen Group, which owns Porsche, remains committed to electrification of its fleet, with electric vehicles expected to account for 10% of its 2023 sales.

Porsche’s joint venture e-fuel plant in Chile.

Like Ferrari, Porsche envisions a future where carbon-neutral e-fuels power internal combustion engines of its 911 sports car. To that end, Porsche has already begun production of e-fuels at a joint venture with Siemens in a plant in Chile. In the plant’s pilot phase, around 130,000 liters (34,342 gallons) of e-fuel will be produced, eventually increasing to 550 million liters (145.3 million gallons) by 2026.

“Their advantages lie in their ease of application: e-fuels can be used in combustion engines and plug-in hybrids, and can make use of the existing network of filling stations,” said Porsche CEO Oliver Blume. “We have broad technical expertise. We know exactly what fuel characteristics our engines need in order to operate with minimal impact on the climate.”

In fact, in December, Porsche executives filled a Porsche 911 with the first synthetic fuel produced from the site.

Porsche will start by using the fuel in its race program and at its performance experience centers. The fuel will ultimately be sold to oil companies.

So, what is an e-fuel?

Synthetic fuels, also known as e-fuels, have the same fundamental chemical composition as conventional fuels used in internal combustion engines. But e-fuels use electricity from renewable sources to create synthetic methanol through an intricate process including water, hydrogen, and carbon dioxide. Businesses claim to be able to operate gas-powered motors almost CO2-neutrally. Oil would still be required for engine lubrication.

Barbara Frenkel, Porsche board member

But here’s the hang up. 

It takes a lot of electricity to separate hydrogen from water and combine it with carbon to create synthetic fuel. At best, half of the energy in the electricity is converted into fuels. A liter of e-fuel costs roughly $5 per liter to manufacture today; that’s $18.93 a gallon. By 2030, that’s expected to fall to as little as $3 a liter, but that’s still $11.36 a gallon.

But Porsche has put its money where its mouth is, investing $75 million investment in HIF Global LLC, a startup developing fuels using electricity with plans to construct 12 e-fuel production facilities in Texas, Chile and Australia producing 150,000 barrels of fuel per day.

But keep in mind that the United States consumes 8.8 million barrels of gasoline daily, and you can see the long-term challenge of e-fuels. 

Still, it could prove to be a way for conventionally powered internal combustion engine cars to continue to be built without affecting the environment. 

“Porsche is committed to a double-e path: e-mobility and e-fuels as a complementary technology. Using eFuels reduces CO2 emissions,” said Barbara Frenkel, member of the Executive Board for Procurement at Porsche AG at the plant’s announcement in 2021.

“With the e-fuels pilot plant, Porsche is playing a leading role in this development.”

Generated by Feedzy