As Europe races toward a greener future, alternative fuels are rapidly gaining traction as feasible replacements for traditional fossil fuels.
To aid the decarbonisation of Europe, the European Union has set stringent emissions targets and is investing heavily in renewable energy infrastructure.
But what are the leading alternative fuels, and how are they transforming Europe’s energy landscape? This article explores the rise of alternative fuels, their challenges and their potential to redefine the future of transportation.
Why Europe is transitioning to alternative fuels
Europe is transitioning to alternative fuels to reduce greenhouse gas emissions, enhance energy security, and meet ambitious climate goals. The European Union aims to reduce net emissions by 90% before 2040 and be climate-neutral by 2050, so the pressure is on to help businesses decarbonise their fleets.
With rising concerns over fossil fuel dependency, especially in light of geopolitical tensions and fluctuating oil and gas prices, many European countries are investing in alternative fuels.
Stricter environmental regulations, such as the EU Green Deal and bans on internal combustion engine cars by 2035, are also driving this shift.
Additionally, advancements in technology and infrastructure, alongside Government incentives, are making alternative fuels more viable for both businesses and individuals.
Key types of alternative fuels gaining traction
Hydrogen, biofuels, and electric battery technologies are the key types of alternative fuels growing in popularity in Europe.
These fuels are increasingly being adopted as the continent aims to reduce carbon emissions, enhance energy sustainability, and transition towards a greener economy.
Biofuels
The European market for biofuels has grown considerably over the last few years and the European Union is now the world’s leading consumer of biodiesel.
Biofuels are renewable energy sources that can significantly reduce greenhouse gas emissions compared to traditional fossil fuels. They can be produced from feedstocks, including vegetable oils, animal fats, and waste oils, making them versatile and accessible.
To help increase the use of biofuels, the EU has introduced minimum biofuel use mandates. This means biofuels are now blended with traditional fossil fuels at the pump. As there’s no need for infrastructural changes, this alternative fuel is a popular choice for both suppliers and consumers.
Hydrogen
Hydrogen fuel cells offer a clean alternative to traditional fossil fuels, emitting only water vapour which significantly reduces greenhouse gas emissions.
European governments and industries are investing in hydrogen infrastructure by increasing the number of refuelling stations and production facilities. As a result, the viability of hydrogen-powered vehicles is improving.
Additionally, advancements in technology have led to more efficient hydrogen production methods, including green hydrogen generated from renewable energy sources. This shift is particularly evident in heavy-duty transport, such as buses and trucks, where hydrogen's high energy density provides a practical solution for long-range travel.
With increasing support from policymakers and growing public awareness of environmental issues, hydrogen is poised to play a crucial role in the future of sustainable transportation.
Discover our guide to hydrogen fuel for more information.
Electric power
As countries strive to meet ambitious climate goals, the transition to EVs is seen as a crucial step in reducing greenhouse gas emissions and improving air quality.
Many European governments have implemented subsidies, tax breaks, and investments in charging infrastructure to encourage drivers to switch from traditional combustion engines to electric alternatives.
Additionally, the growing availability of diverse EV models, along with improvements in battery technology that enhance range and reduce charging times, has made electric vehicles more appealing to a broader audience.
As a result, the market share of EVs continues to grow, signalling a significant shift towards sustainable transportation in Europe.
Explore our EV guides to learn more.
Synthetic fuels
Synthetic fuels, or e-fuels, are a crucial solution for decarbonising key sectors such as aviation, maritime transport, and heavy-duty road transport. They are a carbon-neutral fuel type that can be used in internal combustion engines, so have compatibility with existing infrastructure.
The current production process of e-fuels is costly, but European countries are investing in research and development to make them more widely available.
Synthetic fuels will likely be used alongside electric vehicles to help drivers to reduce their carbon emissions.
Infrastructure development in Europe
The European Union has introduced initiatives, such as the Fit for 55 package, which aims to facilitate the transition to cleaner transport by expanding the alternative fuels infrastructure. These targets include:
- The installation of EV charging stations for cars and vans every 60km.
- Hydrogen refuelling stations for both cars and lorries to be introduced from 2030 on all urban roads.
- Simplify the payment process at EV charge points and hydrogen refuelling sites.
To further support the development of alternative fuels infrastructure, the EU has invested €422 million through the Alternative Fuels Infrastructure Facility (AFIF). This will help to expand the alternative fuel networks and make them more accessible to all types of vehicles.
Challenges facing the alternative fuel sector
Although the alternative fuels sector in Europe is rapidly evolving, it faces several challenges that can delay its growth and adoption:
- Infrastructure development: there is a significant need for investment in infrastructure, such as charging stations for electric vehicles and refuelling stations for hydrogen, to support the widespread adoption of alternative fuels.
- Technological advancements: continuous development is required to improve the efficiency and cost-effectiveness of alternative fuels. This can be a barrier for smaller companies with limited resources.
- Market competition: the transport sector is highly competitive, with traditional fossil fuels still dominating the market, making it challenging for alternative fuels to gain market share.
- Consumer acceptance: there is often a lack of awareness and acceptance among consumers regarding the benefits and availability of alternative fuels. There are also many myths about EVs which are deterring some drivers from switching to electric.
- Supply chain issues: establishing a reliable supply chain for alternative fuels can be difficult, particularly for new technologies that are not yet widely produced or distributed.
Who is leading the way with alternative fuels?
When we last considered the alternative fuel market in Europe, the Netherlands had the most EV charging points and Germany was leading the way with hydrogen technology.
Two years on and the main players in the alternative fuels sector are the same. The Netherlands still have the highest number of EV charging points with 176,605 public chargers but Germany and France are now catching up.
However, with over 2 million battery-electric cars and vans, it’s clear that Germany’s EV infrastructure will need to expand rapidly over the next few years to meet the increasing demand.
Germany also continues to lead the way for hydrogen technology with 113 hydrogen refuelling points. The number of hydrogen cars and vans remains relatively low at 2267, but the use of hydrogen is growing. As the infrastructure develops, so will the uptake of hydrogen vehicles.
Edenred and alternative fuels
Edenred is a global leader in digital payment solutions, particularly known for its employee benefits and incentive programs. In recent years, the company has recognised the importance of sustainability and has actively sought to reduce its environmental impact.
One of the ways Edenred is contributing to this goal is through the promotion and use of alternative fuels. In 2024, Edenred acquired Spirii who offer a broad range of EV charging solutions in Europe. This acquisition will support businesses and employees in making greener choices.
The rising use of alternative fuels in Europe marks a significant shift away from traditional ICE vehicles. Governments, businesses, and consumers increasingly recognise the urgent need to reduce carbon emissions and combat climate change. As a result, alternative fuels such as biofuels, hydrogen, and electricity are becoming integral to the transportation sector.
This transition not only supports the European Union's ambitious climate targets but also fosters innovation and economic growth within the green technology sector. As infrastructure improves and public awareness grows, the continued adoption of alternative fuels will play a crucial role in shaping a cleaner, more sustainable future for Europe.
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