The emissions from e-fuels are equal to the amount taken out of the atmosphere to produce the fuel - making it CO2-neutral overall.
The fuels release CO2 into the atmosphere when used in an engine
E-fuels, like e-kerosene, e-methane, or e-methanol, are made by synthesising captured CO2 emissions and hydrogen produced using renewable or CO2-free electricity.
Most major carmakers are betting on battery-electric vehicles as the main route to cut CO2 emissions from passenger cars.
But suppliers and oil majors defend e-fuels, as well as a number of carmakers who don't want their vehicles weighed down by heavy batteries.
E-fuels are not yet produced at scale.
The world's first commercial plant opened in Chile in 2021, backed by Porsche and aiming to produce 550 million litres per year.
Porsche claims that the e-fuel would make their present fleet of cars nearly 85 per cent more efficient in terms of CO2 emissions.
Other planned plants include Norway's Norsk e-Fuel, due to begin producing in 2024 with a focus on aviation fuel.
E-fuels can be used in today's ICE vehicles and transported via existing fossil fuel logistics networks.
Supporters say e-fuels offer a route to cut the CO2 emissions of our existing passenger car fleet, without replacing every vehicle with an electric one.
Critics highlight that manufacturing e-fuels is very expensive and energy-intensive.
Using e-fuels in an ICE car requires about five times more renewable electricity than running a battery-electric vehicle.
Some policymakers also argue that e-fuels should be reserved for hard-to-decarbonise sectors such as shipping and aviation.