Alternative fuels: EU legislation plays into the hands of the USA and China

The International Vienna Motor Symposium 2025 offered a wide-ranging scientific overview of sustainable energy sources for cars, lorries, ships, aircraft and motorsport

The energy transition, the switch from fossil fuels to renewable fuels, will be lengthy and expensive. ‘It's a marathon run,’ said Werner Tillmetz, Professor at the University of Ulm, at the International Vienna Motor Symposium 2025. Currently, around 23 per cent of global greenhouse gas emissions come from transport, with cars and vans accounting for almost 50 per cent of this.

The battery-electric drive alone is not enough to defossilise traffic. Although it has made great progress, "it is not the ideal solution for all areas. Even in a completely defossilised future, liquid and gaseous fuels will be needed to ensure a secure supply of energy," explained Gavin Dober, Research and Development Manager at supplier group Phinia Luxembourg Sarl, in his presentation. The alternative drives ‘can also be more economical, more social and more environmentally friendly than battery electric drives.’

Far too little ‘green electricity’

Werner Tillmetz used the example of Germany to show that there is not even enough ‘green electricity’ available for cars. In Germany, the sun shines for 20 per cent of the hours in a year, but the wind does not blow regularly. Fossil-fuelled power plants have to be provided for this power generation gap, the ‘lull period’, as it is not cost-effective to temporarily store such a large amount of energy in batteries. In addition, there are major competitors for the electricity. ‘In the UK, heat pumps alone will require 70 per cent more power in the grid,’ said Tillmetz. Due to the still considerable share of fossil fuels in electricity generation, ‘the climate effect is also rather homeopathic.’

Market distortion through EU laws - threat of 15 billion fine/year

This is due to EU legislation for vehicles, which only regulates exhaust emissions. By 2035, new cars will have to be zero emission. ‘This is tantamount to a ban on combustion engines,’ warned David Bothe, energy market expert at Frontier Economics. And it distorts the markets. This is because car manufacturers who do not sell enough electric cars in Europe are threatened with penalties totalling billions of euros, specifically ‘more than 15 billion euros per year’, according to Bothe. Car manufacturers can minimise this penalty by forming a pool with car companies that sell a large number or only battery electric vehicles and buying CO2 credits from them. However, this still costs them almost two billion euros. ‘This leads to a redistribution to the American and Chinese markets,’ said Bothe, meaning to competitors, especially Tesla and Geely.

David Bothe (Frontier Economics); credit: ÖVK, reprint free of charge

E-fuels could help

For certain sectors, however, battery electric drives will continue to play a niche role at most in the longer term. An impact assessment in 2024, the EU came to the conclusion that ‘conventional drives will continue to dominate in aviation and shipping in 2040,’ explained Lukas Mauler, Manager at Porsche Consulting. Today, aviation and shipping each contribute around two per cent of total greenhouse gas emissions worldwide. ‘In 2040, 40 to 60 per cent of the car and truck fleet will still be powered by conventional drive systems.’ That's more than a billion vehicles. "Alternative fuels are needed to reduce the carbon footprint. E-fuels can help here." These are synthetic fuels that are produced using green electricity from air, water and, if required, CO2 that is captured from the air or from industrial waste gases. The range extends from green hydrogen to e-diesel and e-gasoline at the end of the conversion chain. They can also be used to operate combustion engines in a carbon-neutral way if the entire chain of effects is taken into account.

E-methanol for ships and lorries as a promising alternative

In order to achieve the estimated 20 billion litres of petrol equivalent by 2030, an investment volume of around 500 billion euros is required by 2030. ‘That's half of what is planned for fossil oil and gas projects by 2030,’ Mauler calculated. With corresponding increases in efficiency in the technology, a location with very low green electricity production costs, such as in South America at two cents per kilowatt hour, and large production volumes, ‘you get to around 700 euros per tonne for e-methanol,’ said Mauler. Today, e-methanol is considered the most promising e-fuel for the initial phase, especially for shipping, but also for lorries in China. According to Mauler, fossil methanol currently costs between 400 and 800 euros per tonne.

New opportunity for unused petrol stations

"Methanol has great potential, also in terms of light industrialisation. It is a liquid fuel. Methanol will become the core technology for the decarbonisation of heavy trucks," said Yuan Shen, Chief Developer of Zhejiang Geely Holding in China. Existing petrol or diesel filling stations that are no longer in use will be able to sell methanol in the future. According to Shen, methanol is also much safer than hydrogen. Geely is building a methanol ecosystem that ranges from the generation of green electricity and CO2 capture as the basis for e-methanol (‘green’ methanol) to transport, refuelling infrastructure and methanol-powered vehicles.

Other regions of the world are focussing on biofuel as a substitute for fossil fuels, with Brazil leading the way with ethanol. ‘Worldwide, ethanol is the most widely used biofuel,’ said Dober from Phinia. Bioethanol from Europe reduces the CO2 footprint by almost 80 per cent compared to petrol. As biofuel, like e-fuels, can also be added to fossil fuels, even small quantities can reduce the CO2 footprint of vehicles. The largest producer of ethanol is the USA, followed by Brazil. In France and parts of the USA, many commercial vehicles are fuelled with HVO, hydrogenated vegetable oil. According to Dober, biofuels account for more than five per cent of the world's liquid fuels.

Drives have to be adapted for ethanol and methanol as they are corrosive and have poor ignition. Due to the significantly lower energy densities compared to petrol, diesel or paraffin, the liquid fuels ethanol and methanol require larger tanks and injection systems to achieve the same range.

Formula 1 from 2026 only with ‘renewables’

Formula 1 will stipulate renewable fuels from 2026. Ethanol and methanol have a clear weight advantage over hydrogen or battery drives. Outside of Formula 1, there will also be racing series with hydrogen drives, reported Peter Schöggl, Head of Business Field Racing, ADAS and Vehicle at AVL List. BRP-Rotax, on the other hand, is focussing on battery-electric or hybrid drives for leisure vehicles such as snowmobiles, according to Steffen Meyer-Salfeld, Head of BRP-Rotax Advanced Development. Hydrogen drives are still in the concept phase. In aviation, ‘sustainable aviation fuels and hydrogen are the key technologies for reducing the carbon footprint,’ said Christian Reitmayr, project assistant at the Vienna University of Technology.

Understanding and optimising the entire chain

An important decision-making aid when choosing the optimum e-fuel is efficiency, i.e. how much of the energy used reaches the wheel of a vehicle. Marc Sens, Manager at the technical consultancy firm IAV in Berlin, presented a simulation model that compares the efficiency of the three e-fuels hydrogen, methanol and ammonia over the entire life cycle, from production, storage and transport through to combustion. This also shows that the production location plays a major role. ‘In North Africa, the same solar panel supplies two to three times more electricity than in Central Europe,’ said Sens.

The three fuels also have different levels of losses during transport. They are particularly high for hydrogen. ‘Every percent difference in efficiency represents a large number of wind turbines and solar panels, which also have an immense carbon footprint in the construction and operation of the plants,’ said Sens. He demanded: ‘We need to consider, understand and optimise the entire chain.’

Thierry Campenon, Chief Developer at OPmobility, Belgium, also argued in favour of a holistic approach: ‘For example, you can leave out a bumper to save CO2, but the vehicle will have a worse life cycle assessment because the aerodynamics suffer without a bumper.’ Poorer aerodynamics means higher fuel consumption and therefore higher CO2 emissions. Look at the overall balance sheet is also a worthwhile exercise for drives that are currently labelled as emission-free. The production and transport of raw materials alone can cause a significantly larger CO2 footprint than comparable combustion engines. ‘For a 60 kilowatt-hour battery, this is almost six tonnes of CO2 equivalent,’ said Campenon. By recycling lithium, cobalt and nickel, this CO2 footprint can be greatly reduced. Overall, this footprint can be reduced by more than 40 per cent by 2030 compared to today if the service life of the batteries is also extended, according to OPmobility's calculations.

The technical consulting company FEV Aachen also takes the availability of the individual energy sources required into account in its life cycle analyses. FEV expert Norbert Alt presented the results. For the EU target of 2035 for zero exhaust emissions, FEV considers battery electric drives to be the best long-term option for passenger cars, also thanks to the expected improvements in efficiency and costs. In contrast, Alt did not consider e-fuels to be relevant until 2040, as they would not be sufficiently available and too expensive before then. Electric cars with range extenders, which are very popular in China, should also be recognised as carbon-neutral in Europe, Alt suggested. Because with the combustion engine on board as a generator, a serial hybrid that generates electricity from petrol when the batteries are empty, CO2 emissions can be reduced enormously even with fossil petrol and at the same time customers can be relieved of range anxiety. They also represent a cost-effective alternative to pure battery-electric drive systems.

High energy costs due to merit order as a major hurdle in Europe

The speakers at the symposium agreed that alternative energy sources will not become cheap. This starts with electricity. Although ‘the production costs for solar and wind power already appear to be unrivalled in terms of cost,’ said Thomas Koch, Director of the Karlsruhe Institute of Technology (KIT), electricity costs are always based on the most expensive production site according to the EU's merit order system. And in future, this will continue to be mostly gas-fired power plants, which will have to provide the necessary electricity during the winter lull periods when there is little wind blowing or sun shining. This gas power will be much more expensive in future than it is today, as these gas-fired power plants will only be in operation for around 5,000 hours in Germany, for example. This means that their high construction and operating costs will be spread over fewer and fewer operating hours. This also applies to electrolysers, which are necessary for the production of green hydrogen and other e-fuels. Koch considered batteries as the sole temporary storage solution during the winter lull periods to be suitable for bridging the gap in the short term at best. The bottom line is that up to almost 50 cents per kilowatt hour are added to the generation costs in Germany as a surcharge for grid expansion and for gas-fired power plants during winter lull periods, Koch calculated.

In contrast, China already offers electricity generation costs of around four cents per kilowatt hour in certain regions and kilowatt hours at the charging station of 13 to 26 cents, whereas in Germany the average price at charging stations is closer to 87 cents, reported Holger Klein, CEO of ZF. In China, this not only facilitates the sale of electric cars, but also their production and the manufacture of alternative e-fuels, which require a lot of green electricity. According to Markus Heyn, Member of the Board of Management of Robert Bosch GmbH and Chairman of Bosch Mobility, the price per kilogramme for green hydrogen in China is already around three euros, compared to 16 to 24 euros in the EU. Heyn: "We need to create similar framework conditions in Europe so that technological openness and diversity are possible. I am confident that we can achieve this."

Download press release:

PI_Alternative fuels_EU legislation plays into the hands of the USA and China_16062025.pdf

Download PDF • 116KB

For further information, visit: https://wiener-motorensymposium.at/ ; https://oevk.at/ and  https://www.melzer-pr.com/motorensymposium