Fraunhofer Institute for Environmental, Safety and Energy Technology UMSICHT
Fraunhofer Institute for Environmental, Safety and Energy Technology UMSICHT

Fraunhofer UMSICHT takes a stand: Fuels of the future

Background: Climate Goals in the Transportation Sector

Benzin-Zapfsäulen.
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By 2045, the German transportation sector is supposed to become largely greenhouse gas neutral. To achieve this goal, greenhouse gas emissions must be reduced by more than 40 percent compared to 1990 levels by 2030. Currently, however, Germany has not even reached half of its target.

The transformation process required must not be viewed as a challenge that can be solved by technology alone. As far as the transportation sector is concerned, we need to rethink concepts that reduce traffic volume and shift it toward more efficient modes of transport. Technological strategies focus primarily on electrification. Electrification is the central technological strategy, particularly in the passenger car sector. For air and maritime transport, certain segments of heavy-duty transport, and mobile machinery, however, energy-dense, storable energy sources will continue to be needed. There is ongoing discussion about which alternative fuels low in CO₂ can complement the direct use of electricity. In principle, hydrogen and fuels produced from biomass or from CO₂ are viable options.

Fraunhofer has already addressed the role hydrogen can play in the mobility transition in other publications[1]. We are referring to the latter two types of fuels. These include methanol, ammonia, and Fischer-Tropsch-based fuels. They are usually in liquid form, and some are comparable to today’s fossil fuels as regards their properties. Hydrogen is required to produce a large portion of these liquid fuels, and its availability is expected to be limited in the foreseeable future. This creates competition for its use. Sustainable biomass is also available only in limited quantities and is in demand across various sectors. The use of CO₂ as a feedstock is subject to technological, energy and infrastructure requirements, requiring significant amounts of renewable energy.

[1] https://doi.org/10.24406/publica-3126 and https://doi.org/10.24406/publica-4141

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Positions of Fraunhofer UMSICHT

Alternative Fuels

  1. In the future, there will be a need for low-CO2 fuels with high energy density for various applications that cannot be electrified.
  2. Future fuels should be largely CO2 neutral and resemble today's liquid energy sources. For CO2 neutrality, it is not
    only the raw material that is crucial but also the production process, which should emit as little CO₂ as possible, making direct use of as much renewable energy as possible.
  3. High-quality fuels can be produced, in combination with renewable energy, from CO₂ and hydrogen as well as from sustainable biomass or biogenic residues
  4. Residual materials of biological origin and biogenic waste streams, e.g., sewage sludge or biowaste fractions, should preferably be used as feedstocks for fuels, as regulated, among other things, in the EU’s Renewable Energy Directive (RED). The scale and type of energy crop cultivation must be socially responsible and must not jeopardize food supply or existing ecosystems. This also applies to imported biomass. A market economy alone cannot ensure this kind of control, which is why appropriate regulatory instruments are needed.
  5. It can be assumed that, for the time being, primarily unavoidable exhaust gases from industrial processes will serve as the CO2 source and biomass as the carbon source.
  6. In the future, we will need more energy than we do today. The expansion of renewable energy must therefore be accelerated. Furthermore, we must prioritize the purposes for which the renewable energy potential that can be harnessed in Germany should be used. Energy and fuel supply requires international cooperation. For reasons of supply security, these international partnerships must be diversified.
  7. Technological processes for producing fuels from biomass or CO₂ are well established. Their implementation is often hindered less by technical barriers than by economic, regulatory and logistical ones. The availability of raw materials is often a major obstacle.
  8. Technologies that use biomass or CO2 as feedstock for carbon-based fuels complement one another and enable not only diversification of feedstock sources but also country-specific solutions. Renewable fuels of the future will therefore draw on both feedstock sources. It is therefore advisable to continue developing several technologies for the production of renewable fuels in parallel.

As of June 2026

Necessary steps

Mobility Sector

  1. Since not all modes of transportation can be powered by battery-electric vehicles, the development of renewable fuel technologies must be advanced in addition to electric mobility.
  2. Since renewable energy and sustainable carbon sources are limited resources, priority must be given to applications for which no more efficient electrical alternatives are available.
  3. Renewable energy plays a key role—not only in the production of fuels. The expansion of these energy sources must therefore be accelerated as far as possible. Both battery-electric powertrains and synthetic fuels can only help mitigate climate change if sufficient renewable energy is available.
  4. To secure Germany’s position as an industrial location, fair and long-term partnerships must be developed with countries that have significant potential for cost-effective renewable energy. An efficient infrastructure for electricity and hydrogen must be established to facilitate the import and distribution of such energy. This effort must take into account sustainability standards, local value creation and geopolitical resilience.
  5. Technological solutions alone are not enough to achieve climate goals in the transportation sector. They must be supplemented by strategies to reduce traffic volume, shift to more efficient modes of transportation and make better use of existing infrastructure.

Alternative Liquid Fuels

  1. Biomass and CO2 are limited resources that can be used in varying quantities depending on the respective country or region. To avoid over-reliance on any single source, different technologies are needed that must be developed in parallel.
  2. Both the feedstock and the processes used to produce alternative fuels must be sustainable and likewise efficient. This requires high-performance, stable catalysts and processes that utilize green electricity as directly as possible to provide the energy needed for the synthesis steps. At the same time, these processes should be capable of being operated dynamically and flexibly, thus allowing adaptation as required according to the availability of feedstock and energy.
  3. Technologies with a high technological readiness level must quickly be scaled up and demonstrated under real-world conditions. This is necessary to reduce costs, gain operational experience and ensure investment security.
  4. Since renewable fuels cannot compete with fossil fuels in the short term, appropriate policy instruments are needed. These include quota systems, effective CO₂ pricing and targeted support mechanisms. In the long term, a stable, predictable regulatory framework is essential to enable investment in production facilities and infrastructure.

As of June 2026

Fuels of the Future

Kraftstoffe der Zukunft

Further Information on Fuels

Competencies of Fraunhofer UMSICHT