Openness to technology is not a magic formula

Politicians cannot dictate which technical solution should prevail. Innovation comes from the free play of the best ideas, not from rigid regulations. The triumph of the computer did not begin with a ban on the typewriter.

All of these statements are completely correct. And you can now hear them all again in the discussion about the future of the automobile: We still have no way of knowing what mobility will look like in the future. Will battery electric cars really catch on? Or will we also operate our vehicles in the future E-Fuelswhich are not obtained from crude oil in a climate-damaging way, but in a very sustainable way from the CO2 of the atmosphere?

This will go against the planned EU-wide ban on newly registered combustion engines 2035 argued. People like to talk about openness to technology: Let’s let the free market decide which car drive will prevail! All ideas should be given a fair chance! That sounds rational, calm and makes a lot of sense. Unfortunately, a few important points are overlooked.

You can’t get past physics

The first big misunderstanding: Even the most free market cannot overturn the laws of physics. Producing e-fuels means storing energy in the form of fuel. So you have to convert CO2-neutral electrical energy into chemical energy. Then you have fuel, which is then converted into thermal energy and kinetic energy in the car. In a battery-electric car, on the other hand, electrical energy is converted directly into kinetic energy.

So e-fuels are a detour – and the fact that a detour is longer and more inefficient than a direct route cannot be changed by technical innovation. An internal combustion engine has to obey the laws of thermodynamics and they say: It cannot reach the efficiency of a battery. When you have a certain amount of electrical energy available, it is always more efficient to use it to charge a battery than to use it to make fuel. No degree of openness to technology, ingenuity and creativity will change that.

E-Fuels: A good idea for certain niches

A kilometer driven with e-fuels must therefore continue to be more expensive in the future than a kilometer driven with battery-electric power. Why should people want to voluntarily pay a combustion engine surcharge in the future? The idea that we would simply continue to operate our current combustion engine fleet in the future and simply fill up with e-fuels is illusory. The expansion of renewable energy is already a big one Challenge. If we now also want to cover today’s need for petrol and diesel with e-fuels, the need for renewable energy will increase drastically again.
The same goes for fuel made from waste oil or biowaste: you can make fuel out of that too, and that’s a great thing. But of course you can only produce a tiny part of the amount of fuel that we use today, even if we use 100 percent of our biowaste for it.

Many automobile manufacturers have long recognized this and will discontinue the production of internal combustion engines in the next few years. The now discussed ban on new registrations of combustion engines from 2035 will probably not have a particularly large impact anyway, because by then the combustion engine will probably be generally regarded as a phase-out model anyway.

But that doesn’t mean that e-fuels are useless. On the contrary: you will probably use them in the future lot of money can earn. They will not be used for ordinary cars, they will be too expensive for that. But they will be needed for certain industrial processes – and maybe also for airplanes? Or for ships? For people who want to drive their old combustion engines for sentimental reasons in the future and are willing to pay a high price for e-fuel?

All of this is interesting. But you have to be honest: You will not get an e-fuel industry that can survive in a market economy by luring investors with the completely unrealistic promise that family cars will be fueled with e-fuels in the future.

The free market does not always regulate itself

The second big misconception: The free market is pretty good at finding the most efficient solution – but only if everyone bears the costs of their free decisions themselves. However, this is not the case with greenhouse gases: We all bear the costs arising from the emission of CO2, no matter how CO2-intensive our lives are. From a market economy perspective, these costs would have to be charged to each individual issuer, for example in the form of a CO2 tax. Otherwise it is a hidden redistribution from all of us to those who emit the most CO2 – and that has nothing to do with the free market.

So anyone who advocates openness to technology would logically first have to ensure that the emission of greenhouse gases has an appropriate, fair price, otherwise the free market cannot produce any efficient results according to the laws of the economy. This is called “internalization of externalities”. At the moment, however, we are doing the opposite: We support climate-damaging behavior with billions in tax money every year – from tax breaks on kerosene to commuter allowances for combustion engines. A “free play of the best ideas” cannot arise in this way, purely logically.

The argument that the state cannot authoritarianly dictate which technology should prevail is fundamentally correct. But if you confuse ignoring basic physical or economic laws with freedom, don’t be surprised if you get results that end up hurting us all.