The new diesel is being produced at Audi's pilot plant Sunfire in Dresden, Germany. Only a few gallons were created, which the German Federal Minister of Education and Research Johanna Wanka put into her Audi A8 to prove the fuel's bonafides.
The base fuel is known as "blue crude" and begins from a green source. Audi uses electricity from wind, water or solar power sources to separate hydrogen from oxygen in water. The hydrogen is then mixed with carbon dioxide which has been converted in carbon oxide. The blue crude is then further refined to create the e-diesel.
The carbon dioxide is currently supplied by a biogas facilities, but some of that CO2 was captured from the air.
"The engine runs quieter and fewer pollutants are being created," says Sunfire CTO Christian von Olshausen.
The fuel can be combined with conventional diesel fuel, as biodiesel fuels already and would be competitively priced against regular diesel, according to Gizmag.
Sunfire can produce about 42 gallons of e-diesel a day. That seems like barely a drop in the bucket in terms of Europe's energy use, but Audi is ready to commercialize the technology with plans to expand production with a bigger facility in the future.