Synthetic fuels may appeal to well-heeled Porsche and Ferrari drivers, but they aren’t a viable way for Europe’s auto industry to achieve carbon neutrality, Iveco Group NV Chief Executive Officer Gerrit Marx said.
The fuels — which proponents say offer the option to convert renewable electricity into a combustible, liquid source — are “the champagne of propulsion” due to their cost, Marx said in an interview.
“If you have a Ferrari or if you drive your Porsche Turbo once a weekend, you’re not going to care whether a liter costs 5 euros ($5.40) or 8 euros, but that’s not a fuel for the future,” the executive said at the truckmaker’s headquarters in Turin, Italy.
In making e-fuels, captured carbon dioxide is combined with hydrogen split from water in a process powered by electricity. When burned in a combustion engine, the fuels create carbon dioxide. But if made with renewable energy and previously captured CO2, backers argue it’s climate-neutral.
The European Union over the weekend reached a deal with Germany to formally approve regulation for new cars to be zero-emission, a key pillar in a plan to reach climate neutrality by 2050. A vote this month, originally expected to be a simple procedure, was delayed due to objections from the German government’s junior coalition partner.
But the Iveco CEO said he sees Europe’s emissions strategy as rooted in a “dysfunctional political system in Brussels,” citing a lack of coordination among EU agencies dealing with technology, emissions and transportation.
A push toward e-fuels and electric vehicles won’t lead to a turnover of fleets as the EU envisages, the CEO said. “We’ll turn Europe into Cuba, where you see old cars on the roads,” Marx said, since “normal people” won’t be able to afford the new vehicles.
E-fuels also won’t help wean Europe off countries that currently supply it with fossil fuels, he said.
“Guess who wants to become the number one e-fuel maker — Saudi Arabia,” he said. “We are just replacing one source with the other, but from the same region.”
Iveco Group, listed in Milan early last year, is entering its “transformational second year,” the CEO said. The Agnelli family-controlled group may over the next two years “engage in buying a company, and we might consider selling one or more pieces,” Marx said, though he ruled out the sale of the defense vehicles unit.