Renewable and low-carbon liquid fuels are part of the solution for reducing transport emissions, especially in sectors where liquid fuels will remain important, such as aviation, maritime transport and heavy-duty road transport.
The fuel manufacturing industry is already transforming to produce these fuels using new feedstocks and technologies, including sustainable biomass, waste and residues, renewable hydrogen, captured CO₂ and e-fuel production pathways. This transition builds on existing industrial expertise and infrastructure, while supporting Europe’s broader objective of moving towards climate-neutral transport.
This Q&A brings together clear answers to common questions about renewable and low-carbon liquid fuels. It explains how these fuels are made, how their climate impact is assessed, and how they can contribute to Europe’s transition towards climate-neutral transport. It also covers air quality, infrastructure, affordability, investment and energy security.
Liquid Fuels and Renewable Fuels
What is a liquid fuel?
A liquid fuel is a fuel used in liquid form to produce energy, mainly for transportation and industrial uses. Common examples include gasoline, diesel, and biofuels. Liquid fuels are popular because they have high energy density, are easy to store and transport, and can be distributed through existing infrastructure. They are used to power cars, trucks, ships, and aircraft. In addition to conventional fuels, liquid fuels can also be made from renewable sources such as biomass, waste, renewable electricity, and captured CO₂. These low-carbon fuels can be blended with conventional fuels and gradually replace them to reduce emissions.
What are renewable and low-carbon liquid fuels?
Renewable and low-carbon liquid fuels are fuels of non-fossil origin, unlike conventional fuels made from petroleum. They are produced from biomass, waste, renewable energy, or captured CO₂ and work within a circular carbon cycle by reusing carbon already in circulation instead of adding new fossil carbon to the atmosphere. These fuels can be blended with conventional fuels such as gasoline and diesel or used on their own in existing engines and infrastructure. Over time, they can help replace fossil-based fuels in transport and support the transition to a climate-neutral economy, maintaining the advantages of liquid fuels while significantly reducing greenhouse gas emissions.
What are examples of low-carbon and renewable fuels?
Examples of low-carbon and renewable fuels include advanced biofuels, such as hydrotreated vegetable oil (HVO), biodiesel, biomass-to-liquid (BtL), and waste-to-liquid fuels, and E-fuels, also known as synthetic fuels, which are produced using renewable electricity and captured CO₂. These alternatives can reduce emissions compared to conventional fuels and can often be used in existing engines.
How do renewable liquid fuels compare to conventional fuels in efficiency?
Renewable liquid fuels can be about as efficient as convention fuels in existing engines, and HVO-based blends may slightly improve powertrain efficiency. But their overall efficiency depends on the production pathway, with e-fuels showing lower production efficiency than simpler fuels and advanced biofuels varying by feedstock and conversion route.
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Is renewable diesel a low-carbon fuel?
Yes. Renewable diesel is a low-carbon liquid fuel typically produced from sustainable feedstocks such as used cooking oil, animal fats, and other waste-based materials. Unlike conventional diesel made from crude oil, renewable diesel operates within a circular carbon cycle by using carbon from renewable or recycled sources, helping to reduce greenhouse gas emissions. Hydrotreated Vegetable Oil (HVO) is the most common type of renewable diesel.
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Are renewable and low-carbon liquid fuels already being produced in Europe?
Yes. Renewable and low-carbon liquid fuels are already being produced in Europe, while the fuel manufacturing industry continues to expand and transform its production capacity.
Existing refineries are being converted to process renewable feedstocks, while new biorefineries and renewable hydrogen plants are being developed. These facilities can produce fuels from sustainable biomass, waste and residues, renewable hydrogen and captured carbon.
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E-fuels and Synthetic Fuels
What are e-fuels?
E-fuels, also called synthetic fuels, are liquid or gaseous fuels made by using electricity to produce hydrogen from water through electrolysis, then combining that hydrogen with CO₂. The CO₂ can come from captured sources such as industrial flue gases or, in some cases, direct air capture. E-fuels are considered sustainable when they are made by using renewable electricity to produce green hydrogen, and then combining that hydrogen with a sustainable carbon source to make the fuel. Examples of e-fuels include e-methanol, e-gasoline, e-kerosene, and e-diesel.
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How are e-fuels made?
E-fuels are synthetic fuels produced by combining green hydrogen and CO2 from direct air capture (DAC) source, and converting them into liquid or gaseous fuels through methanol synthesis or Fischer-Tropsch processes.
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What role can captured carbon play in renewable and low-carbon fuel production?
Captured carbon can be used as an input to produce some e-fuels: renewable electricity is used to produce hydrogen through electrolysis, which is then combined with captured CO₂ to produce synthetic fuels such as e-methanol, e-gasoline, e-kerosene or e-diesel. The captured carbon can come from industrial concentrated sources or, in some pathways, directly from the air through direct air capture (DAC).
Captured carbon can be managed in different ways. Carbon capture and utilisation (CCU) uses captured CO₂ in products such as synthetic fuels, chemicals or materials, while carbon capture and storage (CCS) stores CO₂ permanently underground. Together, these technologies are often referred to as carbon capture, utilisation and storage (CCUS).
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What kind of renewable electricity is needed to produce e-fuels at scale?
E-fuels require large amounts of renewable electricity to power electrolysers that split water into renewable hydrogen. The hydrogen is then combined with captured carbon to produce fuels such as e-methanol, e-gasoline, e-kerosene and e-diesel.
This electricity can come from renewable sources such as solar photovoltaic, onshore or offshore wind, hydropower and geothermal energy. Solar and wind are commonly considered for large-scale production, while combining different renewable sources and storage can help maintain a more consistent electricity supply.
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Are e-fuels only gasoline?
E-fuels are synthetic fuels that can be produced to match either gasoline or diesel specifications. This means they can be used in existing gasoline and diesel engines without requiring major modifications.
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What are examples of e-fuels?
Examples of e-fuels include e-methanol, e-gasoline, e-kerosene, and e-diesel. E-methanol is typically used as a chemical feedstock and as a fuel for industrial and maritime applications, e-gasoline and e-diesel are designed to replace conventional road transport fuels, and e-kerosene is mainly relevant for aviation.
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What are the environmental benefits of using e-fuels?
E-fuels can reduce greenhouse gas emissions by replacing fossil fuels with fuels made from renewable electricity and captured carbon. They are particularly valuable for sectors such as aviation, shipping and parts of transport, where electrification is often not practical. While e-fuels still release CO₂ when used, the carbon comes from recycled or captured sources rather than newly extracted fossil fuels, helping to support a closed carbon cycle.
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Can e-fuel power airplanes or ships?
Yes, e-fuels can be used in aviation and shipping, but the most relevant fuel type differs by sector. E-kerosene is the most relevant e-fuel for aviation, while e-methanol, e-ammonia, and Fischer-Tropsch e-diesel are often considered for shipping. E-fuels are an important option for decarbonising hard-to-abate sectors such as aviation and maritime transport.
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What vehicles or engines are certified to run on synthetic fuels?
Most liquid e-fuels are designed to work with existing vehicles and infrastructure. Compatibility depends on the fuel meeting recognised standards, such as EN 228, EN 590 or EN 15940 for road fuels, ASTM D7566 and ASTM D1655 for aviation fuels, and technical suitability assessments for marine fuels, while vehicle and engine manufacturers determine whether a specific fuel is approved for use in their equipment.
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Advanced Biofuels
What are advanced biofuels and how are they produced?
Advanced biofuels are low-carbon liquid fuels made from sustainable feedstocks such as waste feedstocks, lignocellulosic biomass, wood and forestry residues, agricultural residues like straw and stover, waste oils and fats, industrial waste or solid waste. They include fuels such as hydrotreated vegetable oils (HVO), biodiesel, biomass-to-liquid fuels and waste-to-liquid fuels. They can be converted into fuels through several pathways, including fermentation to produce ethanol, hydrotreatment to produce hydrotreated vegetable oil (HVO), transesterification to produce fatty acid methyl ester (FAME), and thermochemical processes such as biomass-to-liquid (BtL), which combines gasification and Fischer-Tropsch synthesis, as well as pyrolysis and hydrothermal liquefaction.
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What are examples of advanced biofuels?
Examples of advanced biofuels include lignocellulosic ethanol, hydrotreated vegetable oil (HVO), biomethanol and Fischer-Tropsch synthetic biofuels when they are produced from eligible sustainable feedstocks such as agricultural residues, forestry residues, algae, sewage sludge or other biowaste-derived materials. Depending on the production process, these fuels can be used as renewable diesel, bioethanol, sustainable aviation fuel (SAF) or marine fuel.
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How do advanced biofuels contribute to reducing carbon emissions?
Advanced biofuels reduce lifecycle carbon emissions by replacing conventional fuels with fuels made from sustainable feedstocks such as residue or waste biomass. Unlike conventional fuels which release carbon that has been stored underground for millions of years, advanced biofuels use carbon that was recently absorbed from the atmosphere as plants grew. When the fuel is used, that same carbon is released back into the atmosphere, creating a circular cycle. As a result, net lifecycle CO₂ emissions can be significantly lower than those of conventional fuels and, in some cases, can approach net zero when sustainable feedstocks and low-emission production processes are used. However, the overall climate benefit depends on the full lifecycle, including feedstock sourcing, transport, processing and final use.
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What are the environmental benefits of using advanced biofuels?
Advanced biofuels can reduce lifecycle greenhouse-gas emissions by replacing conventional fuels while also supporting better use of resources and reducing direct pressure on food and feed crops. Compared with first-generation biofuels, advanced biofuels rely more on non-food, residue and waste feedstocks, which can help reduce competition with food and feed production. Broader environmental benefits can include waste and residue recovery, circular-economy value chains, soil-health benefits from some intermediate crops, and biodiversity safeguards when sustainable biomass criteria are applied.
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Sustainable Biomass and Biodiversity
What is sustainable biomass?
Sustainable biomass is any organic material from agricultural, forestry or waste sources that is produced or collected in accordance with sustainability criteria. It can be used as a renewable feedstock to produce energy, fuels and other products while limiting impacts on food and feed production, land use and biodiversity. In the context of advanced biofuels, the term is generally used for eligible non-food and waste-based feedstocks, such as lignocellulosic biomass, wood and forestry residues, agricultural residues such as straw and stover, energy crops, waste oils and fats, industrial waste and municipal solid waste.
Is there enough sustainable biomass in the EU?
Yes. Sustainable biomass availability in the EU is estimated to be sufficient to support projected demand for advanced biofuels towards 2030 and 2050, provided that biomass is mobilised sustainably and supply chains are developed at scale.
This potential comes mainly from agricultural, and forestry feedstocks. Future availability will depend on several factors, including improvements in agricultural and forestry management practices, continued research and innovation, and the development of efficient and resilient biomass supply chains.
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What is the sustainable biomass availability in the EU to 2050?
Sustainable biomass availability in the EU and UK is estimated at 520 to 860 million dry tonnes in 2030 and 539 to 915 million dry tonnes in 2050 for bioenergy. These estimates cover agricultural, forestry and waste feedstocks included in Annex IX of RED II, excluding food and feed crops.
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Will biomass be available in the future?
Yes, sustainable biomass will remain available in the future and could even increase. However, improvements in agricultural and forestry management practices, as well as investments in supply chain-related infrastructure, will be critical to ensuring its sustainable production and efficient collection. By 2050 optimal supply chains are expected to rely increasingly on technologies such as gasification and Fischer-Tropsch, and hydrothermal liquefaction coupled with appropriate hydroprocessing. At the same time, innovations in agriculture and forestry sectors together with green hydrogen integration in biorefining can further improve biomass-use efficiency.
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How do different advanced biofuel feedstocks affect biodiversity?
Different advanced biofuel feedstocks can affect biodiversity in different ways, depending on where they are produced, the prior use and condition of the land, and how their production is managed.
For example, lignocellulosic energy crops grown on degraded lands may support biodiversity improvements, depending on the condition of the land before cultivation. However, the cultivation of these crops on other types of land needs careful assessment, as biodiversity impacts can vary by region, crop yield and local ecosystem conditions.
In short, the biodiversity impact of advanced biofuel feedstocks is not determined by the feedstock alone. It also depends on sourcing practices, land condition, local biodiversity value and land management.
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How is the sustainability of biofuels verified in the EU?
In the EU, biofuels must comply with strict sustainability criteria under the Renewable Energy Directive (RED). Compliance is verified through EU-recognised voluntary schemes and national certification systems. Third-party audits ensure that feedstocks are traceable, originate from approved sources and meet the required sustainability standards. This helps ensure that biofuels placed on the EU market are produced in line with the EU's biodiversity and sustainability requirements.
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The Carbon Cycle
What is the fuels carbon cycle?
The carbon cycle is the process by which carbon is reused and recycled in nature and human activities. For e-fuels, carbon is captured from the atmosphere or other existing sources and then used to produce fuel. When the fuel is used, the carbon is released again, creating a circular carbon cycle rather than adding new fossil carbon to the atmosphere.
How does the fuels carbon cycle work?
The fuel carbon cycle starts with carbon that is already part of the existing carbon cycle. For e-fuels, CO₂ is captured from the atmosphere and combined with renewable hydrogen to produce fuel. For biofuels, the carbon is already absorbed and stored in biomass as plants grow. When these fuels are used, the carbon is released back into the atmosphere, where it can be captured or reabsorbed again. This creates a circular carbon cycle that avoids adding new fossil carbon to the atmosphere and can significantly reduce greenhouse gas emissions compared with fossil fuels.
What are the 4 stages of the carbon cycle?
The carbon cycle can be explained in four simple stages:
1. Absorption: Plants absorb the CO₂ from the atmosphere through photosynthesis and use it to grow.
2. Transfer: Carbon moves through nature as animals consume plants and other animals.
3. Release: Carbon returns to the atmosphere when plants and animals respire, decompose, or when carbon-based materials are burned
4. Reuse or storage: Carbon is absorbed again by plants, stored in soils and oceans, or captured and reused to produce new fuels and products.
In renewable fuels, this natural carbon cycle is put to practical use. Biofuels contain biogenic carbon that was absorbed by biomass during its growth. E-fuels are produced using carbon captured from the atmosphere and renewable hydrogen. When these fuels are used, the carbon is released back into the atmosphere, where it can be reabsorbed or captured again. This creates a circular carbon cycle and avoids adding new fossil carbon to the atmosphere.
Why is the carbon cycle important?
The carbon cycle is important because it will determine whether carbon recycled or whether new carbon is added to the atmosphere. Low-carbon fuels use carbon that is already part of the natural or industrial carbon cycle, rather than carbon emitted by fossil fuels.
This is why fuels made from sustainable biomass, waste, renewable electricity and captured CO₂ can help reduce greenhouse gas emissions. By reusing recycled carbon, they avoid adding carbon to the atmosphere and support a more circular energy system.
Life Cycle Assesment
What is the Life Cycle Assessment (LCA) of a vehicle?
A life-cycle assessment (LCA) measures the total greenhouse gas emissions associated with a vehicle throughout its entire lifespan. This includes emissions from raw material extraction, vehicle and battery or fuel cell manufacturing, energy production, vehicle use, and end-of-life recycling. By considering all stages of the value chain, an LCA provides a more complete picture of a vehicle’s climate impact than assessing tailpipe emissions alone.
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What are life cycle emissions?
Life-cycle emissions are all greenhouse gas emissions generated throughout a vehicle's entire lifespan, from the extraction of raw materials and vehicle manufacturing, to energy or fuel production, vehicle use, and end-of-life recycling or disposal. They therefore provide a more complete measure of a vehicle's climate impact than tailpipe emissions alone.
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What are well-to-wheel emissions?
Well-to-Wheel (WTW) refers to a comprehensive methodology for calculating the total energy used and greenhouse gases (GHG) emitted by vehicles. It evaluates the entire lifecycle of fuel and powertrains, from its extraction (well) to its actual combustion in the vehicle (wheel).
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What is the difference between well-to-tank and tank-to-wheel emissions?
Well-to-Tank (WTT) methodology measures the energy required and emissions generated by extracting, producing, processing, and distributing the fuel (or electricity) to the vehicle's tank.Tank-to-Wheel (TTW) methodology measures the energy used and emissions generated directly by the vehicle itself while being driven.
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What does fuel carbon intensity mean?
Fuel carbon intensity means the amount of greenhouse gas emissions associated with a fuel, usually compared against the energy it provides.
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Environmental and Health Impact
What is the difference between greenhouse gas emissions and air-pollutant emissions from transport?
Greenhouse gas emissions contribute to climate change, while air-pollutant emissions affect local air quality and human health. Greenhouse gases include CO₂, methane and nitrous oxide (N2O), while air pollutants include nitrogen dioxides (NO2), particulate matter, carbon monoxide and volatile organic compounds. Their emissions depend on several factors, including the fuel, engine, exhaust after-treatment system and operating conditions. Particulate matter can come from exhaust emissions, but also from tyre and brake wear and road abrasion. This means that reducing greenhouse gas emissions does not automatically eliminate air-pollutant emissions.
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Do renewable and low-carbon liquid fuels affect air quality?
Renewable and low-carbon liquid fuels can affect air-pollutant emissions, but air quality depends on more than the fuel alone.
Air-pollutant emissions are influenced by fuel composition, engine technology, exhaust after-treatment systems, vehicle condition and operating conditions. Particulate matter can come from exhaust emissions, but also from tyre wear, brake wear and road abrasion. This means that the air-quality impact of a fuel should be assessed together with the vehicle technology and real-world use conditions, rather than looking at the fuel in isolation.
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Transport Decarbonisation
How can we reduce carbon emissions from the transport sector?
Reducing carbon emissions from transport requires a combination of solutions. These include electrification, renewable and low-carbon fuels, hydrogen, greater vehicle efficiency, and carbon capture technologies. Different transport modes will require different pathways, so a technology-neutral approach is essential to achieve climate goals.
How can renewable liquid fuels help decarbonise transport?
Renewable liquid fuels can help decarbonise transport by replacing conventional fossil fuels with fuels made from renewable or low-carbon sources. They can be used in existing vehicles, aircraft and vessels, reducing greenhouse gas emissions without requiring entirely new infrastructure. Renewable liquid fuels complement electrification and are particularly important in sectors where full electrification is not always practical, such as aviation, maritime transport and parts of road transport.
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How can renewable liquid fuels help decarbonise aviation?
Renewable and low-carbon liquid fuels can help reduce aviation emissions by replacing part of conventional jet fuel with lower-carbon alternatives, including Sustainable Aviation Fuel (SAF) and Renewable Fuels of Non-Biological Origin (RFNBOs). Because aviation is one of the most difficult transport sectors to electrify, liquid fuels are expected to remain essential for long-distance flights. Increasing the use of sustainable aviation fuels can therefore play an important role in reducing the sector's climate impact while maintaining air connectivity.
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What infrastructure upgrades are necessary for widespread use of renewable liquid fuels in transportation?
Renewable and low-carbon liquid fuels can use much of Europe’s existing liquid fuel distribution and storage infrastructure. This is a key advantage, because liquid fuels already benefit from an extensive and resilient network across Europe. However, scaling them up will still require investment in new production capacity, including advanced biofuel and e-fuel plants.
Which transport sectors need liquid fuels ?
Liquid fuels will remain important in transport sectors where high energy density, long range and fast refuelling are essential, especially aviation, maritime transport and parts of road transport.
These sectors are harder to fully electrify because batteries can face practical limits linked to weight, range, payload and operational needs. Renewable and low-carbon liquid fuels can therefore help reduce emissions in transport sectors where electrification alone may be difficult to deploy at scale.
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How can we make the internal combustion engine carbon-neutral?
The internal combustion engine can become carbon-neutral when it is powered by liquid fuels made from non-fossil carbon sources, such as sustainable biomass, waste, renewable energy and circular CO₂.
When these fuels are burned, CO₂ is released, but the carbon comes from the natural or industrial carbon cycle rather than from fossil carbon extracted from underground. This allows internal combustion engines to reduce their climate impact, provided that the fuels are produced sustainably and replace fossil-based fuels.
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Why does low-carbon mobility need a mix of technologies?
Low-carbon mobility needs a mix of technologies because different transport modes, users and countries face different challenges. Electrification can reduce emissions, but fleet renewal, used-car markets, charging infrastructure and consumer affordability mean that the transition will take time. For sectors such as aviation and maritime transport, electrification also remains more challenging. Renewable fuels can complement battery-electric vehicles, help reduce emissions from internal combustion engine vehicles that remain on the road, and support a more resilient transition by reducing reliance on a single technology pathway.
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What are Vehicles Exclusively running on Eligible Fuels (VEEFs)?
Vehicles Exclusively running on Eligible Fuels (VEEFs) are vehicles designed and certified to operate only on renewable fuels that meet the greenhouse gas reduction and sustainability criteria set out in the Renewable Energy Directive (RED).
VEEFs are being discussed in EU transport legislation as a way to recognise the climate benefits of renewable fuels in vehicle regulations. By running exclusively on eligible renewable fuels, they could provide an additional pathway to reduce transport emissions alongside electrification and, under current proposals, could be recognised as zero-emission vehicles. They support a technology-neutral approach to transport decarbonisation and could help accelerate investment in renewable fuel production and supply chains.
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Affordability, Investment and Energy Security
How can renewable fuels make low-carbon mobility more affordable and accessible?
Renewable fuels can help make low-carbon mobility more affordable and accessible by giving consumers more low-carbon options during the transition. For many EU consumers, the upfront cost of a new battery-electric vehicle remains beyond their financial capabilities. Moreover, most passenger car transactions take place in the used-car market, meaning many internal combustion engine vehicles will remain in use for years. Renewable fuels can therefore help reduce emissions from existing vehicles while the transition to electrification continues.
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How much investment is needed to scale renewable and low-carbon liquid fuels?
Around €400 billion in cumulative investment will be needed by 2050 to scale renewable and low-carbon liquid fuels. This investment is needed to convert existing assets, develop new production capacity and maintain sufficient conventional fuel supply during the transition. By 2050 the EU will require between 22 and 48 biorefineries to meet projected demand and climate targets.
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Can renewable fuels support jobs and local value chains?
Renewable fuels can support jobs and strengthen local value chains by creating demand for sustainable biomass, agricultural residues, forestry by-products, waste streams and innovative low-carbon technologies. Their production can generate economic opportunities across the entire supply chain, from feedstock collection and processing to fuel production, distribution and use.
By moving from petroleum-based feedstocks to renewable and recycled carbon sources, renewable fuels can help integrate refineries into a more circular economy while creating value in local and regional communities. They can also provide additional income opportunities for farmers, foresters and other biomass producers by turning residues and waste into valuable resources. In the longer term, scaling up renewable fuel production could support more than one million full-time equivalent jobs by 2050, with significant employment benefits across agriculture, forestry, industry and related services.
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What role will European fuel manufacturers play in the energy transition?
European fuel manufacturers can support the energy transition by transforming existing industrial assets to produce renewable and low-carbon fuels and products. Existing refineries, technical expertise, supply chains and fuel distribution infrastructure can help scale renewable and low-carbon fuels for sectors where liquid fuels remain important, such as aviation, maritime transport and long-distance heavy-duty transport. Converting existing refineries into low-carbon and renewable fuel hubs can help preserve industrial capabilities, existing infrastructure and Europe’s strategic autonomy.
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How can renewable and low-carbon liquid fuels support energy security?
Renewable and low-carbon liquid fuels can support energy security by diversifying fuel supply, reducing dependence on fossil fuel imports, and creating a storable, transportable form of energy that strengthens fuel resilience. Having a wide range of technologies for the transition to sustainable mobility enables a more resilient approach in the face of challenges such as limited availability of raw materials, geopolitical risks, dependence on no-EU countries, access to charging infrastructure and social acceptance.
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What affects the price of fuel at the pump?
Fuel prices at the pump are affected by crude oil prices, taxes, VAT, refining, distribution, marketing costs and exchange rates. Crude oil is only one part of the final price, so a rise or fall in crude oil prices does not lead to the same change at the pump. In Europe, taxes and VAT usually make up a large share of the price consumers pay, although their share varies significantly from country to country.