Alternative Fuels BMW Presents Study on Renewable Fuels

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Can renewable fuels power European road traffic? According to a study by BMW and others, yes – but without mentioning the costs.

The Karlsruhe Institute of Technology, the German Biomass Research Center, the consulting company Freyberger Engineering, and BMW have conducted a study on Europe's potential for a renewable fuel market. The study concludes that Europe can fully supply road transport with renewable liquid fuels in the long term. The authors see this as a parallel, scalable path to electromobility. Key to this are political reliability, regulatory clarity, and investments in an independent value chain for renewable fuels.

Supply Potential and Import Requirements

According to an analysis of European bioenergy potential from biogenic residual and waste materials, catch and cover crops, agroforestry systems and renewable non-food raw materials, the European Union will be able to cover between 38 and 55 percent of its road transport fuel requirements with renewable fuels as early as 2030.

By 2035, this share will increase to between 44 and 67 percent; in the high scenario, as much as 107 percent of the predicted fuel requirements of road transportation can be covered by European raw materials by 2040.

In the short term, Europe remains dependent on moderate imports of raw materials for a complete, i.e. 100% substitution of fossil fuels across all modes of transport - including aviation and shipping. The authors point out that the global raw material potential is 43 times higher than the maximum import requirements of the European Union and therefore no structural import dependency is to be expected.

Role of Renewable Fuels Alongside Electrification

The study shows that the electrification of the powertrain remains important, but cannot decarbonize the entire transport sector on its own. Renewable liquid fuels, summarized under the term carbon-neutral fuels, should serve as a complementary pillar - especially for existing vehicles, heavy commercial vehicles, long-distance applications and markets with limited charging infrastructure.

A core topic of the study is a new vehicle class of so-called carbon-neutral fuel vehicles, i.e. vehicles with combustion engines that are specifically designed to run on renewable fuels. This vehicle category, in combination with the existing fleet, is intended to create a reliable demand base so that investments in large-scale production facilities and feedstock mobilization become economically viable. "Feedstock mobilization" describes the necessary steps to ensure that theoretically available raw materials can reach the industry and be used in practice.

Broad Raw Material Base Instead of Bottleneck Debate

In the study, the authors contradict the public perception that the availability of sustainable raw materials is the limiting factor. For example, used edible fats and oils, which are often the focus of discussion, only account for around one percent of the available raw materials portfolio in the scenario for 2030.

The majority of the potential comes from lignocellulosic residues such as straw and wood residues, organic waste, non-food crops on marginal or degraded land, catch and cover crops and agroforestry wood. Including these categories results in a bioenergy potential for Europe of around 280 to 361 million tons of oil equivalent in the medium scenario and up to around 380 million tons of oil equivalent in the high scenario for the period 2030 to 2040.

In the study, the "medium scenario" describes the conservative exploitation of raw materials, while the "high scenario" describes the highly ambitious mobilization of the same raw material base - with correspondingly higher bioenergy potentials.

Technological Perspective and Fleet Effect

On the conversion side, the study focuses on known and new conversion pathways that provide different fractions such as middle distillates (diesel fuel) and naphtha (petrol components). Depending on the path, the energy conversion factors vary significantly: hydrogenated vegetable oils, for example, achieve around 0.88 in middle distillate and 0.06 in naphtha, while methanol-based power biomass-to-liquid concepts achieve values of up to 0.77 for middle distillate and 0.16 for naphtha.

In the fleet analysis, the authors combine this potential with scenarios of a highly electrified fleet and a more molecule-based fleet. In 2040, the fleet of vehicles defined for carbon-neutral fuels could account for up to just under half of the petrol requirements of the road transport fleet, depending on the scenario, while the diesel share would remain dominated by heavy commercial vehicles.

Cost and Industry Perspective

The authors of the study focus on technical potential and volume balances, but explicitly describe renewable fuels as a market-based path. They link the costs primarily to economies of scale along the value chain: the more production and feedstock mobilization are scaled up, the more the specific costs of renewable fuels should fall. The study does not include specific costs.

For the automotive industry, this means that the availability of raw materials is not the bottleneck in the long term - competitiveness compared to fossil fuels and purely electric drives depends on CO₂ pricing, regulatory stability, investment security and the speed of industrial ramp-up. The authors therefore see politics as a decisive lever in determining whether the potential identified in the study will actually be realized by 2040 and translated into significantly lower costs.

Strategies for Manufacturers and Suppliers

As an outlook for vehicle manufacturers and suppliers, the authors of the study describe that internal combustion engine drives will remain relevant as part of a climate-neutral drive mix for much longer than a purely electric scenario would suggest. The prerequisite is that engines, exhaust gas aftertreatment and fuel systems are optimized for the use of renewable fuels and that corresponding vehicle concepts are established on the market.

At the same time, the authors see locally produced renewable fuels as a contribution to Europe's energy policy sovereignty. The development of decentralized production capacities could reduce greenhouse gases and strengthen regional value creation and resilience to geopolitical risks. According to the authors, this could open up new industrial policy scope for the European automotive and supplier industry.

Notes on the Conclusion of the Study

The authors point out in the study that competing uses of raw materials, detailed rules of the Renewable Energy Directive and practical implementation issues, including mobilization, are only taken into account to a limited extent. The potentials presented are therefore to be understood more as technically or bioenergetically achievable quantities - not as planned supply logistics.