IVL Swedish Environmental Research Institute

While climate targets require a near-complete phase-out of fossil fuels by 2050, with substantial reductions needed before then, gasoline vehicles are expected to remain in the fleet beyond when these reductions are required. Unlike diesel, there is no widely available renewable substitute for fossil gasoline at scale beyond ethanol and bio-naphtha, with limited blending potential. This creates a structural gap between policy ambitions and the expected development of the passenger car fleet. The analysis shows that renewable gasoline can be produced through multiple pathways, including methanol- and ethanol-to-gasoline routes, refinery co-processing, and renewable naphtha streams. However, these pathways vary but are generally complex and costly, and scaling them up remains difficult.

To date, large-scale investments have not materialized, except for bio-naphtha, a by-product of HVO and SAF production. The analysis shows that decarbonizing gasoline is inherently challenging. Renewable gasoline faces significant commercial barriers, notably a declining gasoline market, weakening the case for new investments. Additional challenges include high production costs and competition for key intermediates. The analysis further shows that policy instruments are unlikely to fundamentally overcome these structural barriers. In the short to medium term, the analysis indicates that the most realistic pathway for decarbonizing gasoline cars is to increase the use of existing renewable drop-in components, primarily ethanol and renewable naphtha. Even modest increases can deliver meaningful emission reductions at the system level. However, the mitigation potential with this approach is limited and insufficient to meet the climate targets. Further reductions will require a broader transition beyond incremental blending, including options such as fully renewable fuels, vehicle adaptation (e.g., flex-fuel retrofits), or a gradual phase-out of gasoline vehicles. The analysis, however, shows that all of these pathways involve significant challenges, and no single solution is clearly dominant. Ultimately, the scale of the challenge depends on how many gasoline vehicles remain. Faster electrification reduces the number of vehicles needing low-carbon fuels and is therefore critical to limit long-term reliance on gasoline.