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eFuels in the fuel market

Renewable energies are the key to a sustainable transition. As one of the most important legislative measures to achieve the tightened EU climate targets, the revision of the Renewable Energy Directive (RED) should be used to create a level playing field for all relevant emission reduction technologies. Only a technology-mix of forward-looking solutions can decisively accelerate the defossilization of our economy. A stronger consideration of the role of sustainable renewable fuels, and eFuels in particular, is vital here.

 

Keyarguments

The focus of a comprehensive EU climate policy must be on phasing out fossil energy carriers as quickly as possible and providing effective incentives for the production and deployment of all relevant carbon-neutral alternatives, including eFuels. To fully unlock the potential of sustainable renewable fuels, their market ramp-up needs to be driven in all sectors. Limiting the use of eFuels to sectors where direct electrification is currently not possible (air and maritime transport) will not lead to the best results - neither economically nor in terms of climate protection. Both the market and the willingness to pay are too low in these sectors to ensure a ramp-up and thus the availability of renewable fuels - at least not in time and not without significant subsidies.

It is therefore of strategic importance to include road transport as a driving force – for example, by setting a ambitious sub-target in the Renewable Energy Directive – in order to secure the market ramp-up of renewable fuels and the economies of scale that are essential for a significant price reduction of these energy carriers.

According to a study by Prognos AG, the Fraunhofer Institute for Environmental-, Safety- and Energy-Technology UMSICHT, and the German Biomass Research Center DBFZ, the production costs for eFuels will drop significantly by 2050 and are expected to be between €0.70 and €1.33 per liter. As a carbon-neutral substitute for fossil fuels, the use of eFuels can contribute to a significant reduction in CO2 emissions - initially by being blended with conventional fuels (drop-in capability), and ultimately as a 100% replacement. An EU-wide blending of only 5% eFuels in 2030, would result in a saving of 60 million tons of CO2 – equivalent to taking 40 million cars taken off the road for an entire year.

The production of sustainable renewable fuels, and eFuels in particular, requires long lead times and billions of dollars of investment. To ensure that sufficient quantities of eFuels are available in time at affordable prices, it is essential to have regulatory certainty and clear incentives for the fuel industry to trigger investment in industrial-scale projects.clear signals are essential to ensure planning certainty and thus create decisive incentives for more investment in further projects.

Our demands

  • The level of ambition set out in the EU Commission’s proposal to revise the Renewable Energy Directive should be higher in order to create sufficient incentives for necessary investments. We therefore recommend setting a greenhouse gas intensity reduction target of at least 20% by 2030.
  • We recommend a more ambitious sub-quota of at least 5% for hydrogen and eFuels (compared to the proposed 2.6%) for all transport sectors in Europe by 2030. In addition, an interim target of at least 2.6% for RFNBOs by 2028 should be introduced.
  • We support the removal of multipliers in the calculation of minimum shares of renewable energies in road transport. When calculating the GHG emission savings of different energy carriers in road transport, the same fossil fuel comparator should be applied for all energy carriers.

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