IEA: The Role of E-fuels in Decarbonising Transport (revised version)

The International Energy Agency (IEA) recently published its report “The Role of E-fuels in Decarbonising Transport”, highlighting the potential of e-fuels to reduce greenhouse gas emissions across the transport sector.

E-fuels are produced using renewable electricity, captured in green hydrogen (e.g. via electrolysis), and captured CO₂, making them a promising pathway toward a climate-neutral energy system. They are especially relevant for transport modes that are difficult to electrify, such as aviation, shipping, and heavy-duty road transport.

Opportunities and challenges

According to the IEA, e-fuels offer a major advantage in that they are largely compatible with existing engines, vehicles, and fuel infrastructure. This means they can help reduce fossil fuel use relatively quickly, without requiring a full transformation of current transport systems.

However, the report also highlights significant challenges. E-fuels are energy-intensive to produce, and current production costs remain high. Large-scale deployment would require vast amounts of renewable electricity and international cooperation for CO₂ capture, transport, and trade.

Policy recommendations

To enable e-fuels to contribute meaningfully to the energy transition, the IEA calls on governments to:

• Develop clear policy frameworks and incentives to attract investments in production capacity.
• Support technological innovation and scale-up, including demonstration projects and international partnerships.
• Promote the smart allocation of renewable electricity, ensuring it is prioritised for sectors where direct electrification is not feasible.

Conclusion

When sustainably produced and efficiently deployed, e-fuels can form an important complement to electrification and biofuels in achieving decarbonisation of transport. They could play a crucial role in greening global transport systems and supporting the broader transition to a net-zero economy by 2050.