BMW Group and Toyota Motor Europe have joined forces with Spanish fuel giant Repsol and automotive supplier Bosch to launch a six-month pilot program testing 100% renewable gasoline in standard combustion-engine vehicles—a move the companies say could provide alternatives for traditional engines as Europe tightens emissions regulations. The trial, now underway in Spain, aims to demonstrate that millions of existing vehicles can run on carbon-neutral fuel using the current refueling infrastructure, potentially altering the conversation around the EU's 2035 combustion-engine ban.
Why This Matters:
• No vehicle modifications needed: Existing cars can run on the Repsol Nexa 95 renewable fuel without engine changes or infrastructure upgrades.
• Policy influence: Results will be shared with EU policymakers to argue for "technological neutrality" in future transport regulations.
• Carbon reduction: Repsol claims its renewable gasoline cuts greenhouse gas emissions significantly compared to fossil fuels, complying with the EU Renewable Energy Directive (RED).
The Experiment's Mechanics
Around 20 vehicles from BMW, MINI, Toyota, and Lexus corporate fleets are circulating across Spain, exclusively fueled by Repsol's Nexa 95, a gasoline derived from renewable raw materials certified under European standards. The six-month test launched in July 2025 and runs through December 2025, with vehicles operating in real-world conditions to validate the fuel's performance, reliability, and emissions profile.
Bosch supplies the technical backbone through its Digital Fuel Twin system, a blockchain-style traceability platform that logs data from fuel pumps, vehicle sensors, and transaction records. This creates an auditable chain of custody for the renewable fuel, addressing one of the key regulatory hurdles: proving that the fuel consumed is genuinely renewable and not blended with fossil derivatives at any point in the supply chain.
The choice of Spain as the testing ground is strategic. Repsol already offers the renewable fuel at select public stations, and the country's regulatory framework allows pilot projects with fleet vehicles—though not yet for general consumer sales. In Portugal, by contrast, regulatory constraints limit 100% renewable fuel sales to captive fleets only, according to Portugal's fuel regulations framework. Despite the country's ambitious renewable energy targets under the National Energy and Climate Plan 2030 (PNEC 2030), Portuguese drivers should not expect 100% renewable gasoline at retail stations in the near term.
What This Means for Residents
For drivers in Portugal, the pilot offers a preview of a potential future where filling stations stock carbon-neutral gasoline alongside electric chargers. Portugal has committed to 29% renewable energy in transport by 2030, with specific mandates for advanced biofuels, biogas, and renewable hydrogen. Current law mandates escalating blending rates: 13% renewable content in road fuels by 2025, rising to 16% by 2029.
However, the Repsol-BMW experiment tests a different model entirely: 100% renewable fuel, not a blend. If successful, it could bypass the need for costly fleet turnover to electric vehicles, especially for rural areas where charging infrastructure remains sparse. Portugal's Algarve region and interior municipalities still lack adequate fast-charging networks, making renewable fuels a pragmatic option for drivers unable or unwilling to switch to battery-electric vehicles.
Portuguese policymakers are watching closely. The Ministry of Environment and Climate Action has signaled openness to e-fuels and advanced biofuels, but fiscal policy remains challenging: fuel taxes and parafiscal charges on renewables in Portugal are among Europe's highest, according to industry groups. A recent tax exemption under Portaria n.º 226/2026 waives the petroleum products tax (ISP) for certified advanced biofuels and biogas, but the benefit applies only to fleet operators, not retail consumers.
The Skeptics' View
Environmental advocates remain unconvinced. Critics argue that renewable fuels still emit CO2 when burned, even if the carbon was captured during feedstock growth. Life-cycle emissions from electric vehicles—factoring in battery production and grid decarbonization—are 66% to 81% lower than combustion vehicles, according to EU studies.
Moreover, production costs for e-fuels and advanced biofuels remain two to three times higher than fossil gasoline, limiting their scalability without heavy subsidies. Portugal's National Hydrogen Strategy (ENH2) prioritizes green hydrogen for heavy transport and industry, not passenger cars, reflecting skepticism about synthetic fuels' efficiency. The energy losses in producing e-fuels—converting renewable electricity to hydrogen, then to liquid fuel—are substantial, with only 30% to 40% of the original energy retained in the final product.
Land-use concerns also loom. First-generation biofuels derived from soy, corn, or palm oil have been linked to deforestation and food-price spikes, though Repsol insists its feedstocks meet strict sustainability criteria under RED standards. Portugal's Decree-Law n.º 84/2022, as amended, mandates that biofuels used for compliance cannot come from crops grown on former forests or wetlands.
Strategic Calculations
The pilot's timing is deliberate. The European Commission is finalizing regulations under the revised Renewable Energy Directive (RED III), which sets a 10% quota for advanced biofuels and renewable hydrogen in transport by 2030. Automakers see renewable fuels as a hedge against the 2035 combustion-engine ban, arguing that technology-neutral policies should allow any zero-emission fuel—not just batteries.
For Portugal, the stakes involve industrial policy and energy security. The country is positioning itself as a green hydrogen hub, with major projects in Sines and Seia planning to produce renewable hydrogen for export and domestic use. Synthetic fuels made from green hydrogen and captured CO2 could leverage this infrastructure, creating a domestic market for Portugal's abundant wind and solar power.
The National Laboratory for Energy and Geology (LNEG) has studied offshore wind farms to produce synthetic fuels at costs competitive with diesel. If successful, Portugal could manufacture carbon-neutral gasoline and diesel for both domestic use and export to North Africa and Southern Europe—a reversal of its current status as a net fuel importer.
Implementation Challenges
Even if the Spanish trial succeeds technically, market adoption faces steep barriers. Renewable fuel production capacity in Europe is minuscule compared to petroleum refining: less than 2% of gasoline demand could be met with current renewable fuel output, according to industry estimates. Scaling up production would require massive investment in new refineries, feedstock supply chains, and certification systems.
Portugal's Integrated National Energy and Climate Plan allocates limited capital to liquid fuel alternatives, focusing instead on electric vehicle subsidies and charging infrastructure. The government has installed over 5,000 public chargers nationwide, with targets to reach 15,000 by 2030. Whether renewable fuels warrant comparable public investment remains a subject of policy debate.
Fleet operators, however, are eager. Portugal's public transport sector and commercial fleets face pressure to decarbonize but lack the capital to replace thousands of diesel buses and trucks. Renewable diesel and gasoline offer a near-term solution, avoiding the upfront cost of new vehicles while meeting emissions targets. The Lisbon Metropolitan Area has expressed interest in piloting renewable fuels in its bus fleet if regulatory approval and competitive pricing materialize.
What Comes Next
Results from the Spanish trial will be shared with EU transport ministers and environmental regulators in coming months, accompanied by industry proposals for revised vehicle emissions standards. Industry proponents argue that excluding renewable fuels from post-2035 regulations would limit technological flexibility in achieving decarbonization.
Portugal's regulatory response to renewable fuels will depend on several factors: demonstration of cost-competitiveness, availability of production capacity, and feasibility of domestic supply chains. If the Spanish pilot proves successful and renewable fuels become economically viable, support among policymakers may increase. If they remain expensive and difficult to scale, Portugal will likely prioritize electrification as its primary decarbonization pathway.
For now, Portuguese drivers should not expect 100% renewable gasoline at their local station anytime soon. The regulatory framework permits only blends for retail sale, and the fuel remains unavailable at public pumps. But the Spanish experiment—just across the border—may shift that reality within a few years, depending on the pilot's results and subsequent policy decisions at EU and national levels.
The trial's broader significance lies in demonstrating whether renewable fuels can play a role in Europe's energy transition. If the technology proves viable at commercial scale, the 240 million combustion vehicles currently on European roads could remain in service longer, easing transition burdens. If not, the experiment will serve as data informing future decarbonization strategies focused on electrification and alternative powertrains.
