The EU = European Union was one of the first to switch to EVs = electric vehicles. It was intended to ban the sale of new engine cars, but it revised its policy.
An agreement was reached to allow the continuation of sales of engine-powered vehicles on the condition that synthetic fuels are used, which emit virtually zero carbon dioxide, but the pros and cons are divided.

The EU decided on a new policy at the Energy Ministers' Meeting on the 28th of last month. For new car sales after 2035, sales of engine vehicles will be able to continue on the condition that synthetic fuels are used.

The EU initially aimed to ban the sale of new engine-powered vehicles, including hybrids, but changed its policy at the insistence of Germany, the region's largest automotive powerhouse.

Voices of evaluation from German manufacturers

The policy of continuing sales of EU engine-powered vehicles subject to the use of synthetic fuels has been praised by some German automakers.

Volkswagen, whose subsidiary Porsche is engaged in the production of synthetic fuels, emphasized in an interview with NHK that it is shifting to EVs and said, "We think it is appropriate to add the use of synthetic fuels in emergency vehicles and some Porsche series."

On the other hand, the Mercedes-Benz Group, which has set a goal of making all new vehicles EVs by 2030, said of the use of synthetic fuels: "The proportion of fossil fuels can certainly be reduced, but for energy efficiency, it is best to charge the battery with renewable energy. He commented.

What is "artificial crude oil" synthetic fuel? Movement of full-scale production

Synthetic fuel is a liquid fuel made by synthesizing carbon dioxide and hydrogen, also called artificial crude oil. When used as fuel, it emits carbon dioxide, but since it is made using carbon dioxide collected from factories, etc., emissions are considered to be virtually zero.

Since it can be used at existing gas stations and engine vehicles, it is expected to be an alternative to gasoline and other fuels toward the realization of a decarbonized society, and technological development is progressing around the world.

Among them, the company, founded seven years ago in Karlsruhe, southwestern Germany, is working on the development of synthetic fuel production technologies and continues research at an experimental plant. The company plans to establish a manufacturing base in Germany and begin full-scale production of approximately 7,3000 tons per year, and is currently proceeding with the development of facilities at a rapid pace. We plan to increase production tenfold by next year.

Tim Beltken, CEO of Inelatec, a company engaged in the production of synthetic fuels, expressed his desire to start full-scale production of the EU, saying, "We will need a large amount of synthetic fuel, and we must expand the scale of production quickly." On top of that, he said, "We want the synthetic fuels that we produce in earnest to be used in all fields such as shipping, aviation, and car transportation, where they may be used, and synthetic fuels are a solution to decarbonize cars running around the world."

Will it be cheaper? Staying high? What are the cost challenges?

Ralph Diemer, executive of the eFuel Alliance, an organization that promotes the use of synthetic fuels, said of the price of synthetic fuels: "At the moment they are quite high, and the production cost is 1 or 5 euros per litre, but if they are produced on a large scale and economies of scale are achieved, the cost will drop to about 6 to 1 euros per litre. If a tax system that prioritizes synthetic fuels over fossil fuels is established, it can be viable as a business," he said, expressing his hope that production costs will fall due to increased demand.

Regarding EVs, Mr. Deemer also commented on the dependence on China for important resources used for batteries and other products, saying, "Is it correct to have a policy that further increases dependence on some important resources procured from China in the current situation? Instead of banning engine-powered vehicles, we should decarbonize engine-powered vehicles."

Meanwhile, Transport and Environment, an environmental NGO that opposes the use of synthetic fuels in ordinary cars, released a report last month outlining the issues.

It points out that "the cost of refueling drivers in Germany in 1 will be 2% higher for synthetic fuels than for regular gasoline."

He also expressed the view that the price of synthetic fuels will remain high in the future due to the increasing demand for synthetic fuels and hydrogen as a raw material in aviation, shipping, and various industrial fields, where electrification is difficult in the future.

Alex Keynes, an NGO expert on the issue, said, "Synthetic fuels are not in sufficient quantities, use a lot of energy to produce, and are expensive. If these fuels are used in automobiles, the amount that can be used for other sectors, such as shipping and aviation, will decrease, increasing the risk of delaying the decarbonization of the entire transportation sector. Using synthetic fuels in cars that have more accessible and energy-efficient EV options is wasteful and undermines Europe's climate goals."

The German government welcomed ...

The German government welcomed the revision of the policy, saying it "paves the way for new sales of engine-powered vehicles."

Meanwhile, Belgian Energy Minister Van der Straaten stressed the importance of the EV shift, while Spain's third deputy prime minister, Rivera, expressed skepticism, saying, "Frankly I don't think it will work, synthetic fuels are too expensive for ordinary citizens."

The EU plans to develop specific rules regarding the use of synthetic fuels in the future.

Japan manufacturers are also cautious about synthetic fuels

Based on the EU = European Union's goal of effectively banning the sale of new engine-powered vehicles, including hybrid vehicles, by 2035, Japan automakers have come up with a strategy to introduce EVs = electric vehicles in Europe.

▼ Nissan Motor Co., Ltd. raised its target for the sales ratio of electrified vehicles in Europe from 2026% in FY75 to 2% in February, citing increasingly stringent regulations on engine vehicles. Of these, 98% will be EVs.

▼ Honda plans to increase the introduction of EVs, as all new vehicles sold in Europe were EVs and hybrid vehicles last year.

▼Toyota Motor Corporation says that all new vehicles sold in Europe by 78 will be electrified vehicles, of which at least half will be EVs and fuel cell vehicles. In addition, the luxury car brand Lexus says that all vehicles in Europe and other countries will be EVs.

With regard to the electrification of vehicles, Japan automakers are adopting a strategy of introducing EVs while also focusing on hybrid vehicles and fuel cell vehicles according to the characteristics of the region.

The recent revision of the EU policy has left options other than EVs, which has been welcomed by representatives of Japan automakers. However, on the other hand, synthetic fuels, which have become a condition for continuing sales of engine-powered vehicles, are cautious about their spread due to the high manufacturing cost.

It is likely that each company will determine whether the flow of EU regulations that have forced Japan automakers to shift to EVs, so to speak, will be relaxed.