Audi is making progress with synthetic fuel development by turning to water in its quest to make CO2 emission-free, e-diesel fuels more readily available.

In collaboration with partners Ineratec GmbH and Energiedienst Holding AG. Audi is building a new pilot facility in Laufenburg, Switzerland that will concentrate solely on e-fuel and e-diesel production. It is expected the facility will have a capacity of 87,987 gallons a year. An application to build the plant will be submitted within the next few weeks, with plans to develop and produce the first quantities of e-diesel in 2018.

The process of creating e-diesel uses a process called electrolysis, which uses an electrical current to create oxygen and hydrogen. Using surplus water, electrolysis will be handled by its hydroelectric power station. This translates into C02-free fuel for a traditional combustion engine, non-electric vehicle use. Residual or surplus product can also be used as waxes used in the food, cosmetic, and other industries.

This project marks one in a long line of alternative energy and sustainability efforts by Audi over the years. Over the last few years, synthetically manufacturer e-gas and e-diesel fuels have been in focus with past collaborations such as Sunfire, an energy technology company looking into e-diesel manufacturing. Another facility in North Germany produces synthetic methane for its G-Tron series A3, A4, and A5 models.

Other automakers have also accelerated efforts to build upon alternative energy solutions. Most notably, Toyota oft-criticized work on hydrogen fuel cell technology, Tesla’s battery lineup, and other automakers working on energy storage and vehicle-to-grid pilots with energy partners.