Summary

T&E commissioned consultancy Ionect to assess the technical feasibility and near-term cost of e-petrol production for passenger cars. The study finds that producing e-petrol in 2030 would cost around €4 per litre. At the pump, this would translate into fuel prices of roughly €7 per litre, compared to less than €2 per litre for fossil petrol. At such prices, e-petrol would be unaffordable for most drivers, particularly as electric mobility offers a significantly cheaper alternative. T&E strongly recommends that co-legislators delete the proposed fuel credits mechanism, as it would increase decarbonisation costs for both industry and drivers and delay the transition to affordable electric mobility.

1. E-fuels in the EU’s car CO₂ law: state of play

In 2023, the EU adopted new CO₂ standards for cars and vans, including a 2035 target effectively requiring carmakers to sell only zero-emission vehicles. Following pressure from the German government, a provision was added for vehicles running exclusively on e-fuels. On 16 December 2025, the Commission proposed a revision weakening the 2035 target from a 100% to a 90% CO₂ reduction, allowing around 11 g CO₂/km. This flexibility would be offset by credits awarded for using green steel (up to 7.7 g CO₂/km) and for advanced biofuels and e-fuels in the fuel mix (capped at 3.3 g CO₂/km). This briefing addresses the limited information currently available regarding the near-term price and availability of e-petrol for drivers.

2. How e-petrol is produced

There are two mature production pathways for e-petrol: Fischer-Tropsch and Methanol-to-Gasoline. Both processes combine captured CO₂ with hydrogen to produce hydrocarbons. Fischer-Tropsch technology, first deployed at an industrial scale during World War II, converts carbon dioxide into carbon monoxide before reacting it with hydrogen. The Methanol-to-Gasoline pathway combines CO₂ directly with green hydrogen to produce methanol, which is subsequently converted to petrol. Neither pathway delivers a single, pure fuel; instead, they produce a mix of hydrocarbon chains including naphtha, kerosene, and heavier fractions such as diesel or waxes. Even plants designed to maximise jet fuel will produce these co-products.

3. E-petrol would cost drivers four times as much as fossil petrol

Ionect’s cost model for 2030 evaluates dedicated e-petrol production and a co-product scenario from e-kerosene production. Producing e-petrol in 2030 is estimated to cost around €4 per litre, compared to less than €1 per litre for refining fossil petrol. When including profit margins, excise duty (0.6 €/l), and VAT (20%), the pump price for e-petrol would reach roughly €7 per litre. For new plants operational by 2045, production costs might fall to €3 per litre, resulting in a pump price exceeding €5 per litre. Battery-electric vehicles are vastly more cost-effective; driving on e-petrol could be up to 20 times more expensive than charging an electric vehicle at home using rooftop solar electricity.

4. Avoiding e-kerosene co-products is possible

T&E investigated whether it is technically and economically feasible to avoid co-products during e-kerosene production. While current large-scale plants produce a range of fuels, developers can optimise processes to maximise jet fuel output. This involves producing long hydrocarbon chains (waxes) and cracking them into jet-fuel-range hydrocarbons. Ionect found that moving to a 100% e-kerosene route by recycling lighter co-products would increase production costs by only around 10%. This suggests that a production pathway focused exclusively on e-kerosene is economically viable, potentially limiting the availability of e-petrol co-products for the car market.

5. E-kerosene co-products could be used for chemicals

If e-kerosene co-products are placed on the market, the volumes would be minimal. T&E estimates that meeting 2035 aviation mandates would result in less than 1 million tonnes of e-petrol oil equivalent, representing less than 3% of the petrol used by European cars in 2035. Instead, e-naphtha co-products could be utilised by the chemicals sector to produce e-plastics. This would direct scarce renewable carbon to a sector with far fewer decarbonisation options than road transport, supporting the transition of ageing European chemical plants.

6. Conclusions and recommendations

The briefing concludes there is no credible case for using e-petrol in cars due to high costs, minimal volumes, and a lack of air quality benefits. T&E recommends deleting the proposed fuel credit mechanism (Article 5a) and rejecting additional fuel accounting proposals. E-fuels should be prioritised for hard-to-abate sectors like aviation and shipping. Finally, T&E urges the maintenance of the 2030–2035 car CO₂ targets and the current tailpipe approach to ensure regulatory certainty and protect the momentum of electric vehicle adoption.