E-fuels can reach price parity with fossil fuels, Aramco scientist says

PARIS -- Saudi Aramco believes it can bring down the cost of producing e-fuels enough to make them a viable way to decarbonize vehicles running on internal-combustion engines, the energy producer’s chief transport technologist said.

"We really believe in synthetic fuels," the Aramco scientist, Amer Amer, told journalists this month in an online news conference to discuss Aramco’s collaboration with Stellantis to test the viability of e-fuels on the automaker’s European engine families.

E-fuels won an exemption this year from EU regulations requiring that only zero-emissions cars can be sold in Europe after Dec. 31, 2035.

The fuels are made by combining hydrogen and carbon dioxide in a hydrolysis process. Their green credentials come from the use of renewable energy such as solar or wind to create "green" hydrogen, as well as capturing carbon dioxide from the air or from point sources such as factories. 

Cars using e-fuels still emit some particulates and carbon dioxide, but proponents say that is more than offset by an environmentally friendly production process. At present, e-fuels are not being made at scale, and their pump price is potentially several times higher than gasoline or diesel.

Stellantis and Aramco’s tests found that e-fuels are a "drop in" solution on 24 of 28 engine families, including diesels, that are certified to Euro 6 pollution standards. That covers about 24 million existing engines, Stellantis says.

Stellantis has spent "in the double-digit millions" to certify the engines, said Christian Mueller, senior vice president propulsion systems at Stellantis. The automaker plans to release a list of VIN numbers so consumers can see if their cars could use the fuels.

Stellantis and Aramco say that the use of e-fuels can reduce CO2 emissions by 70 percent -- on a "well-to-wheel" basis -- over the lifetime of a vehicle with an internal combustion powertrain. Critics say the fuels are too costly to process, are an inefficient use of scarce renewable energy and divert resources that could be used to develop battery-electric vehicles. 

"The nice story here is that making synthetic fuels is not magic," Amer said. "It involves the combination of mature and existing technology blocks."

"We believe they can become viable from a cost standpoint, given the number of cost reduction opportunities that are involved," he added. Aramco is building two e-fuels demonstration plants, in Bilbao, Spain, and in Saudi Arabia. Amer said the plants would come online in 2025.

Potential areas where cost can be reduced include using existing refineries to process e-fuels and using methanol as a transit agent, Amer said. Others include improving carbon-capture technology: CO2 has low concentration in the air, so huge amounts of energy are required to gather enough of it, but Amer said research into new absorbent materials, for example, can bring the cost down from the current $500 to $600 per ton to $100 to $200 per ton.

"There is a technology road map that will drive cost reduction over time," he said.

Other automakers that actively support e-fuels include Porsche, which has financed a demonstration plant in Chile; Ferrari and Renault, which also plans to work with Aramco as part of a joint venture with Geely to build internal-combustion engines.

"Price is the big topic in the room," Mueller said. He said that the pump price of synthetic fuels does not depend solely on lowering the production cost and scaling up, but can be adjusted with taxation, incentives and emissions trading plans.

"With these variables, we are convinced that the price can be even at the pump" with crude-oil based fuels, he said.

Mueller affirmed that Stellantis does not plan to sell new internal-combustion vehicles in Europe after 2030. He described e-fuels as "complementary" to the group’s transition to battery-electric vehicles to become a carbon-neutral company.

He said that many cars produced until Dec. 31, 2029, would still be on the road in 2050, noting that 25 percent of Stellantis’ vehicles were still in use after 20 years. "The exposure time to e-fuels is quite considerable," he said, with maximum CO2 savings coming in 2040.

Potential levers to create parity between e-fuels and fossil fuels include the EU Energy Efficiency Directive, which is being updated this year (currently in draft form). The directive raises the EU energy efficiency target, making it binding for EU countries to collectively ensure an additional 11.7 percent reduction in energy consumption by 2030.

As part of that goal, the directive sets minimum taxation rates for fuels, with a base of 4 cents for e-fuels and a base of 34 cents for fossil fuels. "That is a significant difference," he said. Other benefits for e-fuels include exclusion from the EU’s emissions trading systems.

"With those boundary conditions it’s likely that e-fuels will be introduced," Mueller said, adding that there was no way to predict what the pump price will be.

A key criticism of developing e-fuels for passenger cars is that the investment could better be used for aviation or maritime uses -- or even the plastics industry -- because battery-electric drivetrains are not viable for airplanes or boats.

"We don’t see a competition between aviation and road transport," Mueller said, but rather that "road transport is an enabler for aviation." 

"We can’t introduce e-fuels into aviation right now because ticket prices would go up tremendously," he said. The existing fleet of combustion engine cars will diminish over time, he said, giving the aviation industry time to prepare for e-fuels. 

"The e-fuels capacity can then be used for aviation," he said.