In the energy sector and among car manufacturers, interest in so-called e-fuels is steadily growing. These are synthetic fuels made from hydrogen and carbon dioxide (CO₂). They're especially promising for a climate-neutral economy that is less dependent on fossil fuels—for several reasons. If the hydrogen is produced using electricity from renewable sources and the CO₂ is captured from the air, industrial emissions, or biomass, then the overall production of e-fuels results in little to no harmful emissions. A major plus: e-fuels can be used in existing combustion engines and heating systems without any technical modifications—either as a pure fuel or as an additive.
The key ingredient in making e-fuels is green hydrogen—hydrogen produced using renewable energy. It is considered the most sustainable and climate-friendly option. This hydrogen is generated through electrolysis, a process many will remember from school chemistry class. When powered by wind or solar energy, the result is green hydrogen. It can then be used in various chemical processes, especially when combined with recycled CO₂, which makes the process even more climate-friendly
One common method is called Power-to-Liquid (PtL). It uses CO₂ from the air or industrial exhaust and combines it with hydrogen to create synthetic diesel or kerosene—fuels that are especially useful for planes or cargo ships, which aren’t easy to electrify due to their high energy demands and long travel distances.
Another process, Power-to-Methane (PtM), turns hydrogen and CO₂ into methane. This can be used to store energy, feed into the natural gas grid for heating, or compressed into CNG (compressed natural gas) for vehicle fuel. There are also other “Power-to-X” approaches, like producing methanol, which can serve as a base for gasoline or various chemicals.
All these methods offer greener alternatives to fossil fuels. And while burning e-fuels releases just as much CO₂ as conventional gasoline or diesel, that CO₂ was already pulled from the atmosphere during production. So over time, there’s no net increase in emissions. The long-term goal is even more ambitious: to bind more CO₂ during production than is later emitted—creating a carbon-negative fuel cycle. But that is still a long way off.
There are significant hurdles before e-fuels can be widely adopted. Production is extremely energy-intensive and relies on a large, steady supply of green electricity. If fossil energy sources like coal or natural gas are used to generate the electricity, the overall emissions from e-fuels can be worse than traditional fuels. On top of that, production costs are still very high—currently three to six times more expensive than fossil fuels, mainly due to the small scale of existing operations.
So, what needs to happen for e-fuels to become a real part of our energy mix? Most importantly, we need vast amounts of renewable electricity. That is why regions with lots of sun or wind are ideal for large-scale production. If e-fuels are produced there at scale, both the environmental impact and the cost per unit could become far more competitive compared to fossil fuels.
There are also alternative methods that use biological processes. Some approaches involve microorganisms or enzymes that convert CO₂ and hydrogen into synthetic fuels in specially designed reactors—similar to biogas plants. Researchers are even experimenting with bacteria that consume electricity: certain microbes can live on electrodes and transform electricity and CO₂ directly into liquid fuels like alcohol. While these methods aren’t ready for large-scale deployment yet, many energy and mobility companies see e-fuels as a vital part of future climate strategies.
