Renewable fuels: Europe's last hope of saving the combustion engine

If you buy a new diesel BMW in Germany, it comes with a fully brimmed tank. Not with diesel but a drop-in renewable alternative called HVO100. HVO stands for hydrotreated vegetable oil but, like its petrol equivalent, the fuel can be made from a huge range of organic waste material converted into hydrocarbons chemically equivalent to those found in fossil petrol and diesel. Supporters including BMW and Toyota argue that, such is the CO2 reduction using from these biofuels compared with their fossil-fuel equivalents, they can essentially save the ICE car from becoming just a plaything for the rich come 2035. “If we are serious about reducing carbon emissions as much and as fast as possible, renewable fuels have a big role to play,” Toyota Europe's chief technical officer, Shinichi Yasui, said at a recent event in Brussels. Toyota has proposed a new ‘VEEF’ category for cars, standing for 'Vehicles running Exclusively on Eligible Fuels', which would essentially be treated as zero-emissions in the same way as battery-electric cars are. Biofuels are controversial for “burning food”, for example when creating ethanol from wheat. But the latest fuels are created from waste products as diverse as used cooking oil, sewer grease, ‘pot ale’ from whisky production or animal carcasses unfit for human consumption. That’s putting them back on the map for legislators. Fossil fuels have long been mixed with a small percentage of biofuels. For example, E10 petrol (made with 10% renewable bioethanol) has been the standard 95-octane fuel on UK forecourts since 2021. But the new 100% drop-in alternatives (so called because they require no engine modifications, unlike with pure ethanol) are becoming more popular. HVO100, for example, is available at around 8000 filling stations in Germany and has risen to around 25% of the diesel market this year, according to research from global energy analyst Argus. Biofuels are generally more expensive than their regular equivalents, but as the price of diesel has soared this year, the price gap to HVO has shrunk to within €0.04-0.08 per litre “in many locations”, even falling below in some, Argus research said. Governments have it within their power to reduce taxes on biofuels to push the cost even lower, Toyota argues. And the CO2 emissions benefits mean they’re more than deserving, say its supporters. “The problem that we have with fossil-driven internal combustion engines is that you're taking CO2 that was captured millions of years ago and you're setting it free,” Glenn Schmidt, head of global sustainability for the BMW Group, told Autocar. “With HVO100 it’s a very short loop, meaning you can reduce up to 90% of CO2.” European car makers are seizing on the CO2 reduction properties of these new fuels to make their case to legislators to allow at least some ICE car sales in Europe after 2035. The European Automobile Manufacturers' Association (ACEA) has called on the EU to “recognise the role of renewable fuels” in reaching CO2 targets as the bloc works out how to stick to its reduction goals without handing a European competitive advantage to the Chinese and their cut-price EVs. That might already be happening. The recent French-German agreement on how to benefit European ca rmakers in the big CO2 reduction push “introduces important flexibilities for alternative clean technologies and partially recognises renewable fuel-powered vehicles,” according to the European Association of Automotive Suppliers (CLEPA), which has seen the wording of the agreement between the two major car making countries. Toyota and BMW in particularly have long been banging the drum on keeping a “multi-pathway” approach to decarbonisation, and biofuels probably represent their biggest opportunity to protect their investment in combustion engines and retain jobs. “The transition we are facing now is quite severe. Let's face it: we see every day the impact in terms of employment,” said Pascal Ruch, head of corporate and government affairs at Toyota Europe. “Keeping a part of the market with ICE vehicles, whether 20 or 30%, will also help to support a smoother transition. Of course we want emissions reduction, but somewhere we also have to keep in mind that we have a social role to play.” That would allow Toyota to keep hybrid cars on sale as it finalises development of its third-generation petrol-electric drivetrain. Not everyone is so keen on the idea of renewable fuels for ICE cars, however. “Europe pioneered the use of biofuels a decade ago as ‘renewable’ alternatives to fossil fuels. The consequences have been largely disastrous,” green pressure group Transport & Environment (T&E) said in a paper on the subject. “Unfortunately [suitable sources for these fuels] are limited, meaning Europe is increasingly reliant on unreliable imports,” T&E said, pointing out that Europe imports 80% of its used cooking oil from Asia. By 'unreliable', it means the oil is often substituted with unused palm oil. Last year the UK government started investigations into HVO after industry whistleblowers told the BBC they thought large amounts of these materials weren't waste oil but instead virgin palm oil. And aside from the virgin element, palm oil plantations have long been under fire for displacing rainforest, particularly in south-east Asia. One solution is the ‘digital fuel twin’ developed by Bosch that tracks the fuel supply chain to the end user so that fleets can reliably understand what their biofuels were created from and how much CO2 reduction they can expect. This requires the fuel manufacturers themselves to know and be transparent about where their waste feedstocks originate from. Done right, though, the Bosch system could help overcome the feeling among legislators that, rather than solving the climate problem, renewable fuels are simply pushing it overseas. Bosch, Toyota, BMW and Spanish fuel giant Repsol are currently trialling exactly how a 20-strong fleet of existing Toyota and BMW vehicles can run on Repsol’s Nexa 95 renewable petrol. Nexa 95 costs around the same as premium 98-octane petrol in Spain and is made from used cooking oil, agricultural and forestry residues, organic waste and other sustainable biomass, with no virgin material. “There is a piece of legislation, the Renewable Energy Directive, that makes a list of what they call sustainable feedstocks. It is too restrictive,” Luis Cabra, deputy CEO of Repsol, told the Automotive News Europe Congress earlier this year. Repsol wants to include the use of intermediate crops, which are mainly planted for soil recovery, said Cabral, adding: “I speak to farmers and they say ‘I have a market for food, I have a market for feed and still I have an excess of cereals etc'.” With the promise of synthetic fuels and hydrogen fuel cells fading, due to stubbornly high costs, renewable fuels remain one of the last hopes as an alternative to battery-electric power to replace fossil fuels in cars. They also have the benefit of being able to supply the existing fleet, if they can be scaled reliably with full transparency of the source material. But the “burning food” accusation is too potent for legislators to ignore.

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Renewable fuels: Europe's last hope of saving the combustion engine

Is HVO use "burning food" or another opportunity to decarbonise our roads? EU legislators must decide

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