Electrofuels, also known as “power-to-liquids,” “power-to-gas,” “e-fuels” and “e-gas,” electrofuels can deliver greenhouse gas (GHG) savings compared to petroleum when they are produced using low-carbon electricity. Electrofuels will be incentivized in the European Union (EU) by the recast Renewable Energy Directive (RED II) for 2021–2030 and automaker associations and other stakeholders are advocating for the GHG savings from electrofuels to also count toward EU vehicle CO2 standards.
This study updates a prior analysis on the economic viability of electrofuels in the EU and assesses the lifecycle GHG performance of these fuels. In particular, we analyze how the accounting of electrofuels in the final RED II impacts the GHG performance of these fuels.
We find that because of high production costs, electrofuels will deliver limited—if any—renewable fuel volumes and GHG reductions in the EU in the 2030 timeframe, even with strong policy support. We also find that the RED II effectively counts twice as much energy toward the renewable energy target as the amount of fossil fuels displaced, which will likely result in a shortfall in total renewable energy usage in the EU and thus an increase in fossil fuel use. Significant GHG savings can only be achieved if EU Member States take measures to ensure that renewable electricity used in electrofuels is fully additional – even then, electrofuels would still only offset 0.5% of projected road transport GHG emissions in 2030 in the EU with very high policy support.