We need to bring green energy to Europe
Professor Peter Gutzmer is one of Germany’s most distinguished mobility experts. In this interview with energie+MITTELSTAND magazine, the President of FVV, who is leaving office at the end of the year, reveals why he is advocating an objective and pragmatic approach to the energy transition in the transport sector right now. In conversation with Gerhard Walter, he explains why a mix of carbon-neutral transformation paths can significantly accelerate the energy transition in the transport sector, and the part that the import of green molecules can play in this.
With its theories on climate neutrality in the European transport sector, the industry research association FVV posed the crucial question some time ago: how quickly can we be sustainable? One of the study’s key conclusions was that the speed with which the transport sector achieves the UN climate goals ultimately depends on the technology paths that it chooses to pursue. By extension, these also determine the rate of defossilisation. What does this mean for the German and European energy transition in the transport sector?
The FVV study emphatically shows we can only achieve climate neutrality quickly in the European transport sector through comprehensive, cross-industry targets, a technology-neutral approach and a sense of urgency. It is also essential that existing vehicles in the EU are factored into these measures as quickly as possible. The politically desired shift in Europe to exclusively electromobility for new vehicles is not sufficient to achieve the UN climate goals. The study’s results show that a mix of carbon-neutral transformation paths can accelerate the transition to greenhouse gas neutrality considerably compared to scenarios based on just a single technology option. A step-by-step approach using a mix of technologies with an incremental increase in the admixture of non-fossil fuels in addition to electrification significantly reduces cumulative greenhouse gas emissions over time. As such, the transport sector could be climate-neutral by 2039! But for this to happen, the political goals need to change. So far, this is not evident in the latest proposals from the European Commission on Euro 7 and the CO2 standards for reducing fleet-wide CO2 emissions in the “Fit for 55” package, which still largely ignore renewable fuels.
According to the study, how can a mix of different technologies significantly accelerate defossilisation in the European transport sector? Surely, such an approach contradicts the desire for fully electrified road transport that is driven primarily by the European Commission?
Replacing the existing vehicle fleet, establishing the requisite charging infrastructure and developing solutions for generating carbon-neutral energy will take much too long. Replacing the vehicle fleet alone will take at least 17 years, and we are currently realising that the upturn in the market for electric vehicles hasn’t matched political ambitions. We need to consider all our options – namely electromobility, e-fuels, biofuels, methanol-to-gasoline (MtG), hydrogen combustion, fuel cells, hybrid models and so on. The key to minimising greenhouse gas emissions is to cut out the use of fossil energy carriers as quickly as possible. Shortfalls in infrastructure and raw materials, which are an issue for all technology paths, should be resolved in the form of global circular economies for energy and recycling systems. This is particularly true in terms of the essential expansion of infrastructure required for alternative powertrain types and the availability of materials for the different technologies.
The FVV study has demonstrated that Germany and Europe cannot achieve the ambitious climate goals unless existing vehicle fleets are included in the measures. So what must be done to achieve carbon neutrality in the European transport sector as quickly as possible, including existing vehicle fleets?
I have already emphasised how important it is to decarbonise existing fleets: worldwide, we are approaching 1.4 billion vehicles, with 330 million vehicles across the whole of Europe and over 48 million cars in Germany alone. In light of the uncertainty, customers are holding on to their vehicles for longer. As such, the average fleet age is 11 years. It is completely irrational to politically curtail the use of carbon-neutral fuels based on biomass and renewable energy in existing vehicles. We could start with admixtures and let the market for non-fossil fuels develop naturally. For this, we need to come up with a sustainable business model for investors. But permitting new fuel types until a ban on combustion engines in 2035, only for their use to be restricted to aviation and maritime transport from then on? The investments this would require would be colossal! The technological and economic implications are enough to deter most providers.
On LinkedIn, you recently predicted that in the next six to eight years, large volumes of synthetic carbon-neutral fuels will be available in the global market. What makes you so optimistic?
Europe is not the world’s only region to be confronted with the challenge of defossilising the transport sector. A few weeks ago, I was in Japan and had the opportunity to speak with Japanese vehicle manufacturers, scientific experts and, crucially, with the Japanese Ministry of Economy, Trade and Industry (METI). The approach to tackling defossilisation in Japan is as pragmatic as I would like to see here in Europe: fully technology-neutral. Geared towards the needs of the different markets throughout the world, Japan is building upon a diverse array of powertrain systems and fuel types. E-fuels play an important role in the Japanese strategy for the years to come. In the USA, too, we are seeing significant investments in developing e-fuel infrastructure as part of the Inflation Reduction Act (IRA). However, it remains to be seen whether appreciable quantities of such fuels will reach Europe, as the domestic demand in the USA, for example, is too high.
Looking forward, this would mean that developing and marketing carbon-neutral synthetic fuels are key for the energy transition in the transport sector. So what needs to happen in order to ramp up the production of carbon-neutral fuels on an industrial scale and attract investors?
The crucial element is the correct political mindset. Business models and investments need a long-term outlook to be feasible. And so I circle back to the decisive criterion: the time factor. As the FVV study demonstrates, the transport sector can still achieve the climate goals if we introduce e-fuels as soon as possible. The investments being made in generating green energy and the plants for manufacturing such fuels are huge – but at least their transport and distribution are already secured as the infrastructure is already in place. But there needs to be more discussion on the process of carbon capture, i.e. capturing carbon dioxide before it is released into the atmosphere. There is still much that needs to be done to bring the technologies needed for this to the market. To start, we can concentrate on carbon point sources, but efficient carbon capture technologies are needed in the scale-up of e-fuels. Here, our members are also developing market-ready technological solutions in the field of energy generation to sustainably extract the carbon molecules needed for the production of many other products and to enhance the existing facilities to a higher level of maturity.
The study also shows that when synthetic fuels are produced in sunny or windy regions outside Europe, the costs remain in an economically favourable range. The same cannot be said for electricity if it were sourced for electromobility internationally through power lines, for example. Can you explain this in a little more detail?
Opponents of e-fuels argue that the numbers make them infeasible based on the efficiency of the production processes and the “waste” of green electricity. But they assume that we would produce these fuels in Germany or Europe. That wouldn’t make sense. Germany isn’t self-sufficient in terms of its energy supply today. And it won’t be in the future either. E-fuels can be produced using solar energy and wind power in sunny and windy world regions. The “yield factor” of such energy generation plants is many times higher than in Germany, which means that the electricity costs as a key cost driver are significantly lower. In partnership with Volkswagen Group Innovation, the e-fuel company HIF Global and MAN Energy Solutions, Porsche is currently showing that this is a viable solution with its pilot plant in Patagonia. We need to bring green energy to Europe. And the easiest way to do so is in the form of molecules. The entire transport chain is already in place, and the costs of such fuels will be competitive.
There are currently significant efforts in Asia and Arabia to produce synthetic fuels from renewable energy sources in a cost-effective and market-oriented way, and to offer them on the global market in the future. How can Germany and Europe get involved in these projects? Or is it too late for German and European companies to get on board?
First let me briefly point out: these regions are doing this in addition to or as an alternative to the strategic activities relating to electromobility or the transport of renewable energies – fields they are already leaders in. So it is not too late just yet.
Unfortunately, it is unlikely that any significant business can be done without European projects in place. European politicians and, in particular, the energy and mineral oil industry and vehicle manufacturers must give the green light and soon. But will they? The state of discussion in politics, society and the media is fairly one-sided and entrenched. Meanwhile, European economic, energy and environmental policy is virtually isolated on the world stage. We can only hope that the need to diversify will be recognised before the results of a European LCA research project are available in mid-2025. This project aims to develop a holistic approach for emission-free mobility solutions, the related battery value chain and a sustainable circular economy. Incidentally, the modelling tool developed as part of the FVV study is part of this project.
Regulations still always treat electric vehicles as being carbon-neutral – irrespective of whether the energy consumed during their production or the electricity for charging them is sourced from fossil or renewable sources. To broaden this perspective, the study proposes that new goals be defined. For example in the sense of a cradle-to-grave approach, whereby emissions from the construction of the required energy infrastructure are then taken into account. Do you believe this to be the correct, honest approach?
It is the only approach.
The FVV study delivers on this. Its boundary constraints are not tailored to produce the desired outcome but are instead comprehensive and, most importantly, fair. The EU’s latest requirements on e-fuels are the perfect indicator of which standards are being applied. In terms of energy generation, plant technology, transport and distribution, e-fuels must be 100% carbon-neutral. The carbon footprint of battery production and the electricity for charging, on the other hand, is completely disregarded. As an engineer, I am left speechless.
The fact that other regions view the future of the combustion engine differently to Europe is demonstrated by the considerable investments made by Chinese companies in the continued development of this technology. In any case, I do not want to imagine a world in which we drive German cars with Chinese engines now that we are obviously already starting to build German e-vehicles on Chinese platforms.