Automotive Germany Debates Future of Synthetic Fuels

March 2021

For some they’re an important part of Germany’s energy future, for others, a relic of the past that services a technology which should be phased out as soon as possible: synthetic fuels for automotive combustion engines.

In a new study, the Cologne Institute for Economic Research (IW) sees the production of and technology for synthetic fuels as a market with a potential to create EUR 80 billion in added value for Europe as well as 1.2 million new jobs. Moreover, whereas for e-autos, charging infrastructure and new vehicles still have to be constructed, “liquid fuels such as synthetic diesel use existing filling stations and vehicles,” the IW report states, as quoted in advance by Handelsblatt newspaper.

The study, commissioned by three petroleum companies, comes after a call by German Transport Minister Andreas Scheuer earlier in March to ramp up the technology.

“Our target must be the phase-out of the fossil combustion engine by 2035,” Scheuer told the newspaper Welt am Sonntag. “In order to lead the highly developed technology of the combustion engine in Germany into the future, synthetic fuels have to get out of the test tube and into mass production.”

Environmental groups do not agree and cite the far greater “well-to-wheel” efficiency of EVs (73 percent) compared to cars that run on synthetic liquid fuels for combustion engines (13 percent).

“With the same amount of electricity, an electric car with a battery travels at least five times as far as a combustion car with electricity-based fuel,” Greenpeace transport expert Benjamin Stephan told dpa news agency. “Such an absurd waste makes electricity-based fuels far too expensive to run cars in the long term. No one will pay for this at the filling station.”

But that, too, is a statement open for debate.

“We’ll still have combustion engines for a long time, so it makes sense to think about alternative fuels,” says Germany Trade & Invest automotive expert Stefan Di Bitonto. “Even in the electric era, EVs won’t be the only cars on the road. There will still be sports cars that run on synthetic fuel sold at five euros a liter. It will be a niche product, but a significant one in my opinion.”

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