In the 3rd proposed revision in only 3 years, the European Commission has proposed modifying the EU’s current CO₂ standards for cars and vans to allow new internal combustion engine vehicles to continue to be registered beyond 2035 provided e-fuels (synthetic fuels produced using clean hydrogen and captured carbon dioxide) and biofuels are used in road transport.
In our new FCA Standpoint on e-fuels for road transport, we assess the implications of this proposal. Our conclusion: This is the wrong direction for Europe. The EU needs fewer delays in scaling battery electric vehicles (BEVs) and phasing out ICE vehicles. We encourage policymakers to reject this detour.
Our key findings include:
- BEVs achieve ~73% efficiency, compared to ~16% for e-fuels.
- E-fueled cars show the highest lifetime costs across all pathways assessed.
- Electrification offers the strongest and most scalable emissions reductions for road transport.
- While e-fuels could theoretically achieve emissions reductions comparable to a BEV running on grid electricity, their high cost, limited availability, and competition with hard-to-abate sectors make large-scale deployment in road transport unlikely.
- E-fuels may benefit from compatibility with existing vehicles and infrastructure, but our analysis shows they are significantly less efficient and more expensive than BEVs. They also compete for scarce clean hydrogen resources needed in sectors such as aviation and shipping, where direct electrification remains far more difficult.
Diverting scarce e-fuels and biofuels toward road transport risks undermining both industrial competitiveness and decarbonization efforts in the sectors where direct electrification is far more difficult.
Frequent regulatory changes are creating uncertainty and weakening investment, competitiveness, and affordability in the BEV market. The EU should re-commit to full electrification in road transport while prioritizing e-fuels for sectors where alternatives remain limited.