EU Looks to 'Green' Gasoline to Supplement Electric Vehicles

New study says internal combustion engines will still make up over a third of passenger cars and over 60% of trucks and buses in Europe by 2040.

Mar. 23, 2026 at 11:52pm

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A new report from Porsche Consulting and the eFuel Alliance suggests that even as Europe pushes for greater electric vehicle adoption, gasoline-powered vehicles will continue to play a significant role through 2050. The report outlines a path for the EU to be 'entirely free of fossil fuels' by 2046, replacing them with renewable 'e-fuels' made from renewable energy and captured carbon dioxide. However, significant investment and cost reductions are needed for e-fuels to become a viable alternative to traditional gasoline.

Why it matters

The report highlights the challenges Europe faces in transitioning its transportation sector away from internal combustion engines, even as it sets ambitious targets for electric vehicle adoption. The potential role of e-fuels could provide a bridge solution, allowing gasoline-powered vehicles to remain on the road while reducing their environmental impact.

The details

The report projects that internal combustion engine vehicles and plug-in hybrids will still make up 37% of passenger cars and up to 62% of trucks and buses in Europe by 2040, despite the push for electrification. To address this, the EU is opening the door to the use of e-fuels, which are made from renewable energy and captured carbon dioxide. However, the current high cost of producing e-fuels, estimated at around $45 per gallon, needs to come down significantly, potentially to as low as $5.20 per gallon, through large-scale production.

  • The EU could be entirely free of fossil fuels by 2046.
  • The report projects that internal combustion engine vehicles and plug-in hybrids will still make up 37% of passenger cars and up to 62% of trucks and buses in Europe by 2040.
  • The EU's goal is to achieve an 80% battery-electric vehicle share in the passenger car fleet and a 48% share in the truck and bus fleet by 2050, requiring new BEV registrations to reach 80% by 2034.

The players

Porsche Consulting

A consulting firm that co-authored the report on the potential role of e-fuels in Europe's transportation sector.

eFuel Alliance

An organization that advocates for the development and use of e-fuels as a renewable alternative to traditional gasoline.

Dr. Tobias Block

Chief strategy officer at the eFuel Alliance, who commented on the current high cost of e-fuels and the potential for it to come down with mass production.

HIF Global

A Chilean e-fuel company that has announced a $7 billion plant in Matagorda County, Texas, to produce carbon-neutral e-methanol and e-gasoline.

Ralf Diemer

Executive director of the eFuel Alliance, who emphasized the importance of a stable, predictable regulatory framework for e-fuels to reach their potential.

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What they’re saying

“The common criticism is that e-fuel is quite cost-prohibitive. But nobody is doing it in large scale right now, so we're talking apples and oranges when we use numbers like $45 a gallon for e-fuel. What did energy from the first photovoltaic panels cost, or from the first windmill?”

— Dr. Tobias Block, Chief strategy officer, eFuel Alliance

“Financing is the make-or-break issue. Closing the gap between supply and demand requires a stable, predictable regulatory framework. Whether e-fuels reach their potential will come down to political choices.”

— Ralf Diemer, Executive director, eFuel Alliance

What’s next

The EU will need to continue refining its regulations to provide a more favorable environment for the development and adoption of e-fuels, including addressing issues around financing and infrastructure. Successful large-scale e-fuel projects, such as the one planned by HIF Global in Texas, will be crucial in demonstrating the viability and cost-effectiveness of this technology.

The takeaway

While Europe's push for electric vehicles is clear, the report suggests that internal combustion engines, powered by renewable e-fuels, will continue to play a significant role in the region's transportation sector for the foreseeable future. Striking the right balance between electrification and e-fuel adoption will be crucial for Europe to achieve its ambitious climate goals.