'Porsche and Ferrari' Push for E-fuel At The Center of EU Engine Debate

In an EU discussion about a plan to abolish the combustion engine, two of Europe's most illustrious automakers, Porsche and Ferrari, are participating, and they're impacting the debate.

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The manufacturers of high-end sports cars are requesting an exception from the EU's proposed 2035 ban on new internal combustion engine vehicles for synthetic electro fuels, or e-fuels. Even though they are a small part of the car sector, Porsche and Ferrari are so revered in their home countries that last week, just days before a vote, their governments decided to fight the EU proposal.

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The action rocked Brussels and raised new concerns about allegedly climate-neutral e-fuels that have turned out to be prohibitively expensive for huge fleets of cars. Yet, it also raised deeper issues regarding the economic and societal factors influencing Europe's shift to green technology.

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Chancellor Olaf Scholz and President of the European Commission Ursula von der Leyen will meet on Sunday outside of a meeting of the German cabinet, probably to address the e-fuel problem.

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Germany, the only country in Europe without speed restrictions on parts of its legendary autobahn, is a persistent thorn in the side of environmentalists. Vehicles are at the center of German culture. The nation's objection to the new EU regulation also demonstrates its unwillingness to part ways with some of its most iconic icons, such as Porsche's screaming 911.

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Yet the car sector has voiced displeasure over the attempts to delay the EU regulation at such a late date. Many people do not want diversions from a pricey possible alternative, especially because manufacturers are investing billions in getting electric cars on the market.

E-Fuel Technology

Porsche has invested in an e-fuel facility in Chile while the majority of automakers are investing tens of billions on the switch to electric vehicles, in part because the company doesn't intend to produce its 911 sports car with a plug. According to a Porsche representative, using combustion-engine vehicles in a climate-neutral manner might hasten the decarbonization of the transportation industry. He noted that efforts to reduce CO2 emissions more quickly should take into account the current fleet of vehicles. In order to continue producing combustion-engine cars that honor its history, Ferrari has stated that it is looking into alternative fuels.

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E-fuels, according to their proponents, are simply renewable power that has been transformed into a flammable, liquid fuel. It is created by scientists by combining collected carbon dioxide with hydrogen that was separated from water in a procedure driven by renewable energy. The e-fuels emit carbon dioxide when they are consumed in a combustion engine. Yet they contend that it is climate neutral because it was created from CO2 that had already been trapped.

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Germany, the birthplace of the Fischer-Tropsch process, which currently serves as the basis for e-fuels, is one of the countries showing significant interest in technology. During World War Two, the technique enabled Germany's oil-scarce military to produce alternative liquid fuels from coal.

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The greater power density of such fuels, compared to lithium-ion batteries in electric vehicles, would allow automakers to continue producing lightweight sports cars with screaming engines and crackling exhausts for future German and Italian sports cars.

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For the 2026 season, Formula 1, the world's top motor racing competition will use synthetic fuels. While the move will not reduce the sport's total emissions (99% of which originate from non-racing vehicle sources such as air travel to races around the world), it will assist to demonstrate that synthetic fuels can power high-performance automobile engines.

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‘Runaway Train’

Unless they are salvaged by e-fuels, combustion engines are doomed. While Mercedes-Benz AG and BMW AG have teams working on a new generation of combustion engines to meet Euro-7 emissions rules that will take effect in 2025, there are no plans or funds for a generation beyond that.

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"The electrification movement in the automobile sector is currently a type of runaway train," said Roberto Vavassori, an executive of the Italian brake producer Brembo SpA, in an interview. "It may be much worse to suspend or delay because of the massive amount of investment by carmakers."

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The primary issue, according to Vavassori, is "how and where are we going to obtain all the clean energy the electric transition process needs since we might recognize that Europe won't be ready for it, in terms of infrastructure, in 2035."

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A clear 2035 ban on combustion engines has some in the industry worried that an e-fuel exception, even one that only applies to a select few sports vehicles, may lessen the impact on the auto industry. Hard deadlines for moving away from fossil fuels like coal have caused even quicker wind-downs in the energy sector as businesses reduce investments in a failing industry and personnel move to ones with better prospects.

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There are limited exceptions to the new EU regulations, although member states and the parliament already agreed that specialized producers of a small number of vehicles, like Automobili Lamborghini SpA, would obtain a one-year extension on the emissions objectives.

Pilot Project

E-fuels are a component of a larger initiative in Germany to create solid and liquid fuels that store renewable energy but aren't static batteries. A test project at the Karlsruhe University of Technology and a future Dow Chemicals plant in Stade are examples of Power-to-X initiatives.

Ferrari and Porsche are doing the same.

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Porsche owns 12.5% of the e-fuel producer HIF Global LLC, which has a worldwide pilot facility in Haru Oni, Chile.

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According to Ferrari, its innovation program would put a special emphasis on e-fuels, lubricants, and coolants in addition to the electric transition since they "would allow us to minimize emissions while continuing to employ internal combustion engines that retain our legacy."

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The FDP party's leaders, who support economic interests, have been the driving force behind resistance to the combustion engine ban, and their sentiments are being echoed throughout German politics. Christian Lindner, the group's head, is an enthusiast of the Porsche 911 and came under fire for sending Oliver Blume, the CEO of Porsche AG, frequent texts while the coalition was being formed. 

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The FDP, the minor party in Scholz's triangular coalition, has been working to increase its influence in the administration in recent months as a result of a string of disappointing results in local elections and dwindling public support.
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Lindner and Volker Wissing, the transport minister for the FDP, are capitalizing on strong sentiments in the nation after Volker Wissing this week threatened to veto EU legislation. According to a November 2022 study by Nordlight Research, around three-quarters of Germans prefer a combustion engine in their future vehicle.

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Speaking on Friday, Wissing shifted the responsibility for finding a carveout for e-fuels back to the EU. He said that it was paradoxical for the EU Commission to demand strong climate protection goals while simultaneously making it harder to reach them by too ambitious legislation.

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