Porsche begins production of ‘e-fuel’ that could provide gas alternative amid EV push

Porsche and several partners have started production of a climate neutral “e-fuel” aimed at replacing gasoline in vehicles with traditional internal combustion engines.

The German automaker, owned by Volkswagen, said Tuesday that a pilot plant in Chile started commercial production of the alternative fuel. By mid-decade, Porsche is planning to produce millions of gallons of the e-fuel.

Porsche expects to initially use the fuel in motor sports and at its performance experience centers, followed by other uses in the years to come. Ultimately, the plan is for the fuel to be sold to oil companies and others for distribution to consumers.

E-fuels are a type of synthetic methanol produced by a complex process using water, hydrogen and carbon dioxide. Companies say they enable the nearly CO2-neutral operation of gas-powered engines. Vehicles would still need to use oil to lubricate the engine.

In the pilot phase, Porsche expects to produce around 130,000 liters (34,342 U.S. gallons) of the e-fuel. Plans are to expand that to about 55 million liters (14.5 million U.S. gallons) by mid-decade, and around 550 million liters (145.3 million U.S. gallons) roughly two years later.

The Chilean plant was initially announced with Porsche in late 2020, when the automaker said it would invest $24 million in the development of the plant and e-fuels. Partners include Chilean operating company Highly Innovative Fuels, Siemens’ renewable energy unit and others.

Company officials say e-fuels can act like gasoline, allowing vehicle owners a more environmentally friendly way to drive. They could also use the same fueling infrastructure as gas, compared with the billions of dollars in investments needed to build a network of charging stations for electric vehicles.

But entirely replacing traditional fossil fuels with e-fuels would be difficult and extremely costly. In 2021, about 134.83 billion gallons of finished motor gasoline were consumed in the U.S., an average of about 369 million gallons per day, according to the U.S. Energy Information Administration.

Still, production of such a fuel would allow Porsche and others a way to continue producing vehicles such as Porsche’s iconic 911 sports car with a traditional engine alongside, or rather than, a new electric model. While electric vehicles can offer outstanding performance, their driving dynamics differ from traditional engines.

Porsche officials celebrated the beginning of the e-fuel production with the filling of a Porsche 911 with the first synthetic fuel produced at the site.

“The potential of eFuels is huge. There are currently more than 1.3 billion vehicles with combustion engines worldwide. Many of these will be on the roads for decades to come, and eFuels offer the owners of existing cars a nearly carbon-neutral alternative,” Michael Steiner, Porsche’s director of research and development, said in a release.

Steiner and others reiterated Tuesday that the development of the fuel does not change the company’s plans to have 80% of its lineup consist of EVs by 2030.