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E-fuels Gain Wave of Attention, Curiosity

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E-fuels are attracting a wave of commercial interest — and curiosity — as a potential tool for decarbonizing transportation. Also known as synthetic fuels, e-fuels are chemically identical to comparable oil products made from fossil fuels and their tailpipe emissions are likewise equivalent. Yet e-fuels producers promise carbon neutrality or even negative carbon emissions because efuels require CO2 as an input in the production process, creating an incentive for that carbon to be captured and removed from the atmosphere. As a result, the downstream tailpipe emissions of e-fuels would be offset by the emissions removed to aid the production, thus adding no new carbon on a lifecycle basis, advocates say.

“So you basically create a circular economy of CO2,” explains Ralf Diemer, managing director of the eFuel Alliance, in an interview with Energy Intelligence. “Then, in addition to that, if you were to use direct air capture — so you catch existing CO2 out of the air — with that you could also have a negative CO2 impact.” E-fuels could also avoid upstream emissions associated with traditional hydrocarbon production, proponents say.

Investments in e-fuels production have picked up in the last two years with bets from well-known players like Exxon, Amazon, Porsche and Siemens. Customers could come from multiple sectors including aviation, passenger cars, heavy trucks, and shipping. Supporters note that e-fuels can be dropped into existing engines, making them a convenient solution that could be ready sooner than other technologies.

“The new world we are entering in will be much more diverse in terms of technologies,” Diemer predicts, noting that transportation was dominated by the internal combustion engine over the last 120 years, creating a problematic dependency. “Now there are different opportunities or different technologies available.”

As a long-term solution, e-fuels attract more skepticism. Some suggest the world should not rely too heavily on capture technologies, regardless of how the carbon would be used, since the goal should be to avoid releasing emissions in the first place.

Menu of Options

Battery electric cars make “perfect sense” in road transport in many urban areas, where tailpipe emissions would compound already-high local pollution levels. E-fuels, by contrast, could make more sense in regions like the US. “The USA is a car country, but it’s also a long-haul car country. Compared to Europe, very often in the USA you drive huge ranges in one trip. There, maybe electric cars are not the best solution,” he said by way of example. The same goes for Africa, where electrification is unlikely anytime soon, Diemer adds. “That is why we are opposed to bans of any technologies. We are not fighting against electrification, but we don’t think there would be a one-size-fit-all solution.”

Many countries and automakers are eyeing 2035 as a phaseout date for new combustion engine car sales. The existing fleet, though, would take much longer to turn over to electric drivetrains, whereas e-fuels could be dropped in. “Nowadays we have around 1.4 billion cars on the roads of the world. Most of them contain a combustion engine and they won’t just go away,” Diemer says.

“At the end of the day, it is about costs,” he emphasizes, noting renewable energy makes up roughly 60%-70% of the cost of e-fuel production. Production facilities are likely to be positioned in places with affordable and powerful solar and wind, he says, pointing to a Porsche-Siemens partnership in the Patagonia region of Chile, where wind speeds are four to five times higher than in northern Europe. Another factor is water, which is often more of an issue of availability than cost. Saudi Arabia, for example, would be well-placed on the renewable energy side but disadvantaged on the water side. Buying CO2 at a “reasonable price” is likewise important,” Diemer explains.

Carbon Sources

Sources of CO2 for the e-fuel production process are diverse, including direct air capture, traditional carbon capture, and biomass. Some offer greater availability over the long term. Direct air capture (DAC) is “the closest technology to an ideal world,” Diemer says. All forms of capture can rein in hard-to-abate emissions that may be released anyway, for example from the production of cement, which is considered the most difficult industrial sector to decarbonize. “Then, of course, it makes sense to use them and put them into a circular economy,” which includes putting that carbon to use in e-fuels production, Diemer suggests.

Biomass, on the other hand, comes with more limitations. “Maybe we would need biomass in the future for other purposes,” he warns. “But I would say it’s not about judging certain [carbon] sources; it’s about what source is right for a certain time frame. Because it’s quite clear direct air capture is a new technology. It is not used yet in a cost-effective manner on an industrialized scale.” Diemer estimates industrial-scale DAC would take another 8-12 years, so other carbon sources would be needed.

Aviation Key

Nordic Electrofuel, an eFuel Alliance member, believes efuels could reach cost parity with comparable fossil fuel-based products around 2035. The company is focused on the aviation sector, which it sees as the most promising efuels market because of the weaknesses associated with other alternatives. “If you put batteries on a plane, you add more weight, and you cannot take on any more weight,” says the company’s CEO, Gunnar Holen, in an interview with Energy Intelligence. He points to recent comments from Airbus executives stating they cannot add more to their aircraft. E-fuels also “have the most potential to scale,” the CEO says, noting that supplies of used cooking oil for sustainable aviation fuel, for example, are finite.

In that vein, Nordic Efuels has a grand vision for its own expansion, going from 10 million liters per year from its first facility to an intended 200 million liters at its second facility, for an overall target of 1 billion liters of production by 2032. “The first plant will serve as the stepping stone for the coming plants,” Holen says.

E-fuels players are inviting more investors to the table — including from the oil and gas sector. The majors bring a “lot of competencies” in producing similar very products using similar processes, Holen says. “We are open to cooperate with them, and we have been talking with several of the major oil and gas companies.”

Topics:
Mobility, Electric Vehicles, Renewable Electricity , Oil Demand
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