In 2022, the EU agreed on new CO2 emission limits for passenger cars and light commercial vehicles. The goal: to reduce CO2 emissions to zero grams per kilometer by 2035. The problem? Emissions are measured only at the tailpipe—without considering the entire value chain or lifecycle carbon footprint. As a result, internal combustion engines are being pushed out of the market, even if they run on renewable fuels. This effectively bans a technology—a move that MAHLE finds problematic.
First and foremost: MAHLE is not opposed to e-mobility. Quite the contrary—we see it as a major driver of climate-neutral transportation. Our innovations, such as the SCT electric motor with top-tier efficiency and durability, along with advancements in smart charging infrastructure and battery diagnostics, are helping to advance e-mobility.
However, depending on the application and the availability of infrastructure and raw materials, we need additional technologies like e-fuels, biofuels, and hydrogen (including for combustion engines) to accelerate CO2 reductions.
And beyond new vehicle production: Even after 2035, there will still be a massive fleet of internal combustion vehicles on the road that cannot achieve climate neutrality without renewable fuels.
Ambitious targets for renewable fuels are a crucial step toward greener transportation. However, the European lawmakers have so far not factored in the potential of renewable fuels when it comes to approving new internal combustion vehicles beyond 2035. There is hope, though: In March 2023, the German government—backed by several other countries—urged the EU Commission to develop concrete proposals for allowing new vehicles powered exclusively by e-fuels after 2035. A decision is expected by 2026. While the EU Commission has politically committed to considering e-fuels, discussions on implementation are still ongoing.
E-fuels are produced by extracting hydrogen through electrolysis, a process that splits water—such as desalinated seawater—into hydrogen and oxygen. This process, along with subsequent production steps, requires electricity.
In the next step, the hydrogen is combined with CO2 captured from the air to create a liquid energy carrier—e-fuel. Under high pressure and with the help of a catalyst, hydrogen and CO2 bond together. Because electricity is used in the process, this is known as the “Power-to-Liquid” method: electrical energy is converted into a synthetic liquid fuel that can be stored, transported, and used just like conventional fuels
E-fuels unlock the global potential of solar and wind energy. They are produced using renewable electricity, atmospheric CO2, and hydrogen derived from water. The result: a climate-neutral fuel, since the CO2 absorbed during production is simply re-released upon combustion—without adding new emissions.
E-fuels can be stored as easily as conventional fuels and transported over long distances without energy loss. This helps address a key challenge of the energy transition: the inability to continuously feed renewable energy into the grid. By producing e-fuels in sunny and windy regions like Patagonia or Australia, clean energy can be harvested and transported worldwide.
Additionally, e-fuels burn cleaner than conventional fuels, generating lower levels of nitrogen oxides and fine particulate matter. A mere 5% EU-wide blend of e-fuels with conventional gasoline and diesel could cut CO2 emissions by around 60 million tons—the equivalent of removing 40 million cars from the roads for an entire year.
E-fuels can be blended with conventional fuels in any ratio (from 1% to 100%), making them fully compatible with existing internal combustion engines.
This means they can be used in the 1.3 billion vehicles already on the road worldwide.
E-fuels are suitable for all transportation sectors, including passenger cars, trucks, airplanes, and ships. In aviation, shipping, construction, agriculture, and forestry, as well as parts of the heavy-duty transport sector, there are currently few viable alternatives to e-fuels.
Currently, about 60% of the EU’s energy needs are met through imported fossil fuels, while only 15% comes from renewables. Like most industrialized nations, Germany relies on energy imports. However, sun- and wind-rich regions around the world can produce renewable energy at competitive prices—allowing large-scale e-fuel production. This would enable developing countries to build climate-neutral energy systems, fostering international collaboration. By incorporating e-fuels into EU climate goals, Europe can maintain its leadership in engine and industrial plant manufacturing while preserving its strong network of small and medium-sized suppliers.
E-fuels do not require a technological shift in road transportation. For consumers, this means no need to transition to new technologies—just the continued use of a familiar, safe, and efficient fuel. This enhances public acceptance.
E-fuels can be distributed through existing fuel infrastructure, making them readily available to consumers. They combine all the benefits of liquid fuels: short refueling times and high energy density, which enables long vehicle range.
According to the eFuel Alliance, the cost of producing e-fuels in 2025—assuming a 4% blending rate with conventional fuels—will range from €1.61 to €1.99 per liter. This ensures that fuel prices remain affordable for consumers.
The central debate surrounding e-fuels is whether the electricity used in their production would be better utilized for direct electrification rather than fuel conversion. Since e-fuel production is energy-intensive, its efficiency is lower compared to direct electricity use in battery-electric vehicles.
For example, an electric motor converts up to 90% of energy into motion, whereas an internal combustion engine experiences higher energy losses (mostly as heat). However, this efficiency gap can be offset by optimizing solar and wind farms in high-yield regions and then transporting e-fuels to Europe.
Another concern is the current limited availability of e-fuels. The aviation and maritime industries also require substantial amounts of synthetic fuels to achieve climate neutrality. However, the demand across sectors can be complementary, as the e-fuel production process naturally yields different fuel types suited for various transportation needs.
Moreover, road transportation has a higher willingness to pay compared to sectors operating in highly competitive global markets, such as aviation and shipping. This makes the road sector an ideal entry point for scaling up e-fuels.
MAHLE is a proud member of the e-Fuels Alliance and recognizes the immense potential of synthetic fuels. According to a study by the Fraunhofer Institute for Energy Economics and Energy System Technology, up to 88,000 terawatt-hours (TWh) of climate-neutral synthetic fuels could be produced outside Europe.
For perspective: The global energy demand in the transportation sector was 33,603 TWh in 2019. If just half of the global e-fuels potential were utilized, the entire global transport sector could be made climate-neutral—while still leaving ample e-fuels available for other industries.
However, achieving this requires substantial investment.
Large-scale e-fuel production is ready to launch, with dozens of production plants planned worldwide, including in North Africa and South America.
Yet, regulatory uncertainties and lack of investment security are slowing development.
MAHLE, alongside its partners in the e-Fuels Alliance, is actively working to shape policy frameworks and boost public acceptance to accelerate this transformation and create market incentives.
Ultimately, consumers should have multiple choices when it comes to their mobility.