E-Fuels in German Road Transport: Assessing Market Potential and Global Supply Limitations

Abstract

In 2021, the German road transport sector emitted over 145 million tons of CO2-equivalents, with 92% of energy consumption coming from fossil fuels like pet-rol and diesel. To meet net climate neutrality by 2045, fossil fuel use must be phased out. This transition requires technological solutions such as zero-emission vehicles, but can also be supported by the use of synthetic fuels. Synthetic fuels provide a high energy density similar to fossil fuels, enabling large vehicle ranges and compatibility with existing infrastructure. In order to estimate the market po-tential of these fuels, an e-fuel scenario was being created using DLR's vehicle technology scenario model VECTOR21 simulating yearly passenger and com-mercial vehicle purchase decisions. Based on forecasts for large-scale e-fuel pro-duction, costs are estimated to fall to 2.62 Euro/l by 2050. The possibility of registering e-fuel only vehicles would result in 10% fewer battery electric vehicles in the fleet in 2040, resulting in a maximum demand for synthetic fuels in the e-fuel scenario of up to 133 TWh/year. As this is 2.8 times more than the projects announced worldwide for the production of synthetic fuels and also considering other sectors that are highly dependent on the use of syn-thetic energy sources, such as aviation or shipping, the use of electricity-based fuels on this scale in road transport is currently not to be expected. Without the potential approval of e-fuel only vehicles, the additional fuel demand of 48 TWh/year for these vehicles in the e-fuel scenario could be eliminated, which would cut the need for synthetic fuels to defossilize road transport in half in 2050.