Decarbonization potential and limits of e-fuel policies in the EU
E-fuels (i.e., hydrogen synfuels derived from electrolysis and carbon capture) are increasingly viewed as strategic enablers to the European Union’s (EU) energy transition, offering potential decarbonization pathways for hard-to-abate sectors. However, their representation in Integrated Assessment Models (IAMs) remain limited, and the implications of their deployment are insufficiently assessed. This study extends the energy module of the IAM WILIAM by incorporating e-fuels and associated carbon capture to evaluate their energy and environmental implications within the EU. We assess EU policy-aligned scenarios for large-scale e-fuel deployment using the WILIAM energy module. These scenarios are based on a Green Growth (GG) pathway close to 100% fossil-free electricity by 2050, with e-fuel variants reaching 5-15% of final energy demand. Results indicate that e-fuel deployment imposes significant additional electrification (+49% relative to GG without e-fuels), along with substantial infrastructure requirements (+0.7 TW of electricity generation capacity and 0.7 TW of electrolysis capacity). In the most ambitious scenarios, limited industrial CO2 may necessitate alternative CO2 sources such as direct air capture. Reductions in primary energy consumption and greenhouse gas (GHG) emissions are not meaningful relative to GG without e-fuels, owing to cumulative inefficiencies across the energy transformation chain as well as indirect effects such as increased electrification, depleted renewable potentials, and curtailment. Integrating fully-fledged GG across the full model would amplify these trends through higher electrification and constraints from land and materials modules. Hence, these results highlight the need for coordinated strategies (including sustainability criteria, system-level planning, and demand-management) to achieve real emission cuts.
Campos-Rodríguez, J. M., Bartolomé-Quevedo, L., Vega-Maza, D., Álvarez-Antelo, D., Frechoso-Escudero F.A., and Capellán-Pérez, Í. “Decarbonization Potential and Limits of E-Fuel Policies in the EU.” Energy Policy 218 (November 2026): 115529.
https://doi.org/10.1016/j.enpol.2026.115529
