In an unexpected move that underscores the growing strategic importance of synthetic fuels, the German defence company Rheinmetall has announced plans to explore large-scale E-Fuel production. This development is not primarily driven by climate goals, but rather by the need to ensure reliable fuel supplies in case of a major crisis or war in Europe.
At the recent Hydrogen Summit in Saarbrücken, Shena Britzen, head of Rheinmetall’s hydrogen programme, explained the rationale: NATO studies suggest that Russia could be ready for a major war within the next five years. Europe, she argues, currently lacks a robust plan for supplying its armed forces with fuel in such a scenario. Rheinmetall’s proposed solution involves hundreds of decentralised production units across Europe that would use renewable electricity to generate synthetic, drop-in fuels compatible with existing military engines and infrastructure.
These synthetic fuels – whether in the form of kerosene, diesel, or marine diesel – would be produced using electrolysis powered by renewable sources, making them not only logistically independent but also climate-friendly. Each plant could produce between 5,000 and 7,000 tonnes annually. While energy efficiency remains a challenge due to the multi-step conversion process, the security benefits and potential scale of production are seen as outweighing the drawbacks.
From a defence perspective, E-Fuels offer several advantages: they reduce reliance on oil imports, can be produced domestically or in allied countries, and enhance operational resilience. They also contribute to emissions reduction targets – a secondary benefit that aligns with the Bundeswehr’s goal of achieving climate neutrality by 2045.
If implemented, Rheinmetall’s initiative could also benefit civilian sectors. Surplus production could be sold to aviation companies, for example. According to Britzen, with the state as a key investor and customer, E-Fuel production could become economically viable at scale, with future prices potentially falling to around €2 to €2.50 per kilogram.
While the project remains in an early phase, Rheinmetall is already in talks with defence ministries in countries such as Switzerland, Austria, Italy and Spain. Discussions with the German Ministry of Defence have also begun, with further talks expected under the new government.
This development highlights the intersection of energy policy, industrial innovation and security strategy – and adds another argument to the growing case for synthetic fuels as part of Europe’s broader energy and defence resilience.
Source: Handelsblatt, “Rüstungsindustrie: Deshalb setzt Rheinmetall auf E-Fuels”, 23 May 2025.