Could sustainable fuels bridge the gap to zero-carbon road travel?

But it’s also a big producer of greenhouse gas (GHG) emissions – around three-quarters of the EU total for all transport.

Bringing road emissions down is a top priority for policymakers and innovators alike. Electrification is undoubtedly the long-term solution, with EVs making up over 23% of new car registrations in Europe in 2023. Yet it will take time before these are the dominant forms of travel. To meet 2030 climate goals, we need to start making significant emissions reductions today.

That’s where sustainable fuels come in. They can help bridge the gap from the fossil fuel engines of the past to the next generation of zero-emission vehicles. And, driven by incentives and regulations in key markets like Europe and the US, demand for these innovative fuels is growing. They are expected to make up 6% of global road energy demand by 2030, and at least 14% in Europe.

What do we mean by ‘sustainable fuels’ and what equips them to play this role in the net-zero transition?

What are sustainable fuels?

Sustainable fuels are produced using renewable feedstocks, the base materials that make up fuels. They can be blended with or completely replace conventional fuels like petrol and diesel, a property which makes them compatible with the cars, buses and trucks already out on the road today.

Understanding the different feedstocks from which renewable fuels are produced sheds some light on their sustainability credentials. Finding the right ones is a challenge for the industry. They must be resource-efficient, and available at an industrial scale. The EU’s Renewable Energy Directive (RED III) divides feedstocks into three main categories and sets differing limits on their use in renewable fuels to prevent overuse and the knock-on impacts this can have for other industries like agriculture.

These categories are:

• Food and feed crops (1st Generation) which includes crop like corn wheat and barley or vegetable oils like rapeseed, sunflower and soy. These are used to produce fuels like renewable diesel and bioethanol.
• Waste and residue oils (2nd Generation Annex IX B) like used cooking oil and animal fats, not fit for human consumption or animal feed. These can also be used to produce renewable diesel or sustainable aviation fuel (SAF).
• Novel or ‘advanced’ feedstocks (2nd Generation Annex IX A) from a wide range of sources including aquatic plants, microbial biomass, tall oil, animal manure, nutshells and municipal waste. Produced from waste products or cultivated in tanks, advanced feedstocks tend to demand less farmland and put less pressure on ecosystems. These are used to produce sustainable aviation fuel, renewable diesel and bioethanol.

This latter category is an area of constant innovation. Innovators are constantly searching for feedstocks with the optimum sustainable and chemical properties. For example, at our Schwechat refinery, the team is testing the use of liquid from cashew nut shells. Tall oil and cover crops offer a highly promising solution for the near future. 
Sustainable fuels can be produced through ‘co-processing’. This is an innovative process in which biogenic feedstocks are mixed with fossil components in a specialized hydrotreatment plant.
By deploying such solutions at scale, we can bolster the chances of meeting 2030 emissions targets while reducing our dependence on fossil fuels.

Sustainable fuels in action 

The technology may be constantly evolving but many cutting-edge sustainable fuels are already available at filling stations today.
For larger vehicles, HVO100 can reduce CO2 emissions by at least 80% compared to pure fossil diesel, helping companies run their truck fleets more sustainably. More and more facilities are emerging to produce this advanced biofuel at a greater scale. Cars, meanwhile can fill up with a growing range of high-performance, lower-carbon fuels.
By making solutions like these widely available at filling stations, drivers can guarantee environmental responsibility and high-quality mobility at the same time. And they can do so without having to replace their reliable family car or truck fleet. Ultimately, this can reduce the emissions of every journey, whether it’s the commute to work or a long-distance delivery.

Scaling up sustainable fuels

To capitalize on the benefits of sustainable fuels, they need to be rolled out at a far greater scale today. Currently, there are several barriers slowing this process down.
Equipping existing refineries for co-processing or building new specialist facilities is costly, as is research and development into new feedstocks and manufacturing processes. With government subsidies focused on electrification, manufacturers have to fund these investments themselves. There is also intense competition for feedstocks, not only between sustainable fuel producers but also from other sectors that make use of biomass – chiefly energy – driving up production costs even further. Changing EU regulations and restrictions on the number of feedstocks allowed per application only increases this competition.

This coalescence of factors leads to higher upfront development costs, which manufacturers must offset to make products financially viable. In practice, that means the final sustainable fuels you might find at a filling station are more expensive than their conventional equivalents.

The EU Renewable Energy Directive (RED III) mandates that, by 2030, either 29% of energy consumed in the transport sector must be renewable or greenhouse gas intensity in transport must be reduced by 14.5%. At the same time, the policy incentivizes the use of advanced feedstocks, which aren’t subject to the same limits as food and feed crops, used cooking oils or animal fats.
In line with the EU regulations, Individual Member States are also putting their own measures in place. Austria's Kraftstoffverordnung regulation requires fuel suppliers to gradually reduce the final greenhouse gas emissions associated with their fuels by 7% starting in 2024 - or face fines. Germany has introduced a similarly ambitious target, with a 12% reduction by 2026 and a 25% reduction by 2030.

Regulations like these provide both incentives and rules that favor the use of sustainable fuels. They drive consumer demand, giving investors greater confidence to invest in developing production facilities and improving current processes.

Bridging the gap

The global race is on to reduce GHG emissions. Expanding electric and hydrogen-powered travel is a priority but overhauling our entire transport infrastructure is a process that will take time – time we simply cannot afford to waste.
Sustainable fuels offer a bridge to that zero-carbon transport future. They are not perfect but practical. Crucially, they are available at scale today and, with the right regulations in place, have the potential to make a massive sustainable impact.

The road to zero-emission transport is long and complex. We cannot wait for the perfect solution to come along when the need to reduce emissions is so urgent today. Sustainable fuels can help get us through the first leg of the journey.