The Aramco oil company is teaming up with automakers Renault and Geely to launch a new venture that will produce internal combustion engines that run on carbon-neutral synthetic fuels and hydrogen.
The yet to be named venture is aiming to manufacture up to 5 million powertrains annually.
Synthetic fuels, known as e-fuels, work like gasoline but are created using carbon capture and water, so they are carbon-neutral when burned.
The German government this week said it would refuse to support the European Union's proposed 2035 ban on gas and diesel vehicles unless e-fuel and hydrogen are exempted.
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Hydrogen can either be combusted in a piston engine, emitting only water vapor, or injected into a fuel cell that generates electricity by combining it with atmospheric oxygen with a catalyst.
"Aramco’s entry brings to the table unique know-how that will help develop breakthrough innovations in the fields of synthetic fuels and hydrogen," said Luca de Meo, CEO of Renault Group.
Several automakers and oil producers are developing e-fuels, which can be distributed through current fueling infrastructure and allow vehicles to be filled up much more quickly than an electric car can be charged.
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Aramco, which is the world's most valuable company, last year began collaborating with Spain's Repsol on a facility near Bilbao that will combine hydrogen with carbon dioxide to make synthetic aviation and marine fuels.
Porsche will be using an e-fuel made from air and water with wind power in Chile during its Mobil 1 Supercup racing series this season and Formula 1, where Aramco sponsors the Aston Martin team, is switching to it in 2026. Aramco is currently the fuel supplier for the Formula 2 series.
Ford also cited the e-fuel as a major part of its decision to join Formula 1 with Red Bull in 2026.
Aramco entered a hydrogen fuel-cell powered Class 8 truck in the Dakar off-road race across the Saudi Arabian desert in 2022 as a demonstration of the technology's potential.
