Europe's eFuel market could hit 200 billion litres — with the right policy
Only 6% of pipeline projects have secured funding, as the eFuel Alliance calls on the EU to act before the window closes.
Europe could eliminate fossil fuels from its transport sector within two decades if policymakers act decisively now. That is the headline claim of a new study released on 18 March by the eFuel Alliance and Porsche Consulting, which maps the production potential of synthetic fuels (eFuels) across the European transport sector.
The research argues that more than 500 hydrogen and eFuel projects have been announced globally, with over 120 companies planning to reach commercial-scale production by 2030. If that pipeline is fully realised, the alliance says the EU eFuel market could exceed 200 billion litres of petrol equivalent by 2045, enough to supply aviation, shipping and road transport simultaneously, without competition between sectors.
"If the EU delivers on its electric mobility ambitions, our industry can drive fossil fuels out of the market before 2050," said Ralf Diemer, Executive Director of the eFuel Alliance. "Industrial-scale production is what makes eFuels affordable, and we can get there by 2045, provided policy creates the right conditions."
The study pushes back on the assumption that electrification alone can carry the energy transition. Citing the European Commission's own impact assessment for the 2040 climate targets, it notes that approximately 37% of passenger cars, 62% of heavy goods vehicles, and more than 80% of aircraft and vessels are still projected to rely on liquid fuels by 2040. Liquid fuels, the alliance argues, will cover more than half of total transport energy demand even in 2050.
The bottleneck analysis at the heart of the study is pointed. The alliance contends that the EU's electric vehicle rollout scenarios are not credible, citing near-term raw material constraints in nickel and lithium, and structural grid expansion shortfalls over the longer term, eFuels, it argues, are a necessary parallel track.
The catch, Diemer acknowledges, is finance. Only 6% of the 300 transport-focused projects in the pipeline have cleared a final investment decision. "Whether eFuels reach their potential will come down to political choices," he said. The alliance is calling for mandatory eFuel quotas with long planning horizons, streamlined access to renewable power, reformed energy taxation, and expanded use of EU Innovation Fund and European Hydrogen Bank instruments.
MobilityPlaza's take
The funding profile of announced eFuel projects suggests that early impacts will be concentrated in transport segments where liquid fuels are hardest to replace. The highest Final Investment Decision (FID) rates by 2030 are seen in eMethanol, eSAF and eDiesel, pointing primarily to maritime transport, aviation and heavy-duty applications rather than everyday passenger mobility, where eGasoline remains under-invested. Regionally, China and North America dominate the projects that have moved beyond announcements, while the EU lags in FID conversion despite its regulatory ambition, indicating that near-term deployment will be uneven across both sectors and geographies.
Yet momentum in the pipeline remains fragile. With only 6% of transport-focused projects having reached FID, the eFuel outlook hinges less on technical feasibility than on political and financial certainty. The experience of green hydrogen offers a cautionary parallel: despite rapid innovation and a growing number of investment decisions, high costs, uncertain demand and regulatory complexity have slowed delivery. As the eFuel Alliance itself concedes, without long-term quotas, clearer access to renewable power and stronger financing instruments, Europe risks seeing eFuels follow a similar stop‑start path.
