Green Chemistry: How e-fuels will change the energy that moves us

E-fuels, produced using renewable electricity, water, and carbon dioxide captured from the atmosphere or industrial sources, are emerging as a sustainable alternative to conventional fossil fuels. Their greatest advantage is carbon neutrality, coupled with another key benefit: compatibility with existing infrastructure, including internal combustion engines. This enables a smoother technological transition, particularly in sectors where electrification is challenging, such as aviation and maritime transport.

The Production Process

E-fuels are produced by combining hydrogen and carbon dioxide through a process consisting of three essential steps.

The first step is water electrolysis, which separates hydrogen from oxygen. This process is essential for producing "green hydrogen," a term used when electrolysis is powered by renewable energy sources.

The next step involves capturing carbon dioxide from the atmosphere or industrial sources. One such source is the carbon released during energy production from biomass, such as forest residues. Known as "biogenic carbon," it comes from carbon sequestered by trees rather than direct fossil sources.

Finally, hydrogen and CO₂ undergo chemical reactions to generate synthetic fuels. Once synthesised, e-fuels can be refined and distributed through existing logistics networks, ensuring seamless market integration.

The benefits of e-fuels are evident, especially their carbon neutrality, which contributes to reducing the environmental footprint of sectors heavily reliant on fossil fuels.

Additionally, their compatibility with existing infrastructure simplifies adoption and reduces costs. Another major advantage is their ease of storage and transport, allowing e-fuels to be readily available whenever and wherever they are needed.

The First Steps

The first recorded industrial-scale production of synthetic petrol dates back to the Second World War, when Germany used it to fuel aircraft in at least seven factories.

However, this was motivated more by resource scarcity than by environmental concerns. After the war, during the ensuing period of economic prosperity, fossil fuels became the dominant energy source for transport and industry.

However, with the rise of global decarbonisation goals, synthetic fuels have recently regained attention as a key focus of advanced research and development.  

At the end of 2022, one of the most significant investments in the sector — around €100 million — was made in an eMethanol and eGasoline production plant in Chilean Patagonia. The Haru Oni plant, regarded as a pioneering project, is expected to achieve a production capacity of 550 million litres by 2026. It has drawn global interest, particularly in Europe. Other regions, including the USA (Texas), Australia (Bell Bay), and Saudi Arabia (Neom), are also intensifying research and development efforts to evaluate the viability of e-fuels.

Political Fuel

However, e-fuels are not without their challenges. The high cost of production remains a major obstacle, especially as industrial-scale manufacturing has yet to reach the efficiency needed to lower expenses.

Additionally, producing e-fuels requires a substantial availability of renewable energy sources for electricity generation. For e-fuels to become an affordable and widely adopted solution, ongoing investment in research and development is crucial, alongside cost reduction and the sustainable production of renewable electricity.

The eFuels Alliance — an organisation that promotes the industrial production of synthetic liquid fuels from renewable energy sources, bringing together major companies from the automotive, aviation, and energy sectors — highlights that the scientific and technical knowledge required to bring e-fuels to market already exists.

According to the organisation, what is lacking is the necessary political framework to support large-scale production, including taxation policies and ambitious quotas for the fuel sector.

If the right market conditions and regulatory frameworks are established, large-scale production of e-fuels could begin as early as 2030. Initially, they would be blended with conventional fuels, with gradual growth leading to the complete replacement of fossil fuels by 2050, according to the eFuels Alliance.

“Due to the absence of a political framework, industrial-scale production units have yet to be established. However, the technologies and their components are already well understood and widely researched. The first production units, with a capacity of over 500 million litres per year, are set to be launched in 2026. To date, 214 GW of installed hydrogen capacity has been announced worldwide," the organisation states.

The Urgency of Scale

Regarding costs, the eFuels Alliance estimates that as larger quantities of e-fuels are gradually blended with conventional fuels, and as production costs decrease due to economies of scale, these fuels will become more affordable for consumers and for sectors where decarbonisation is particularly challenging, such as aviation and maritime transport.  According to the Institute for German Economics, introducing a 5% blend of e-fuels would raise the overall fuel price at petrol stations by just €0.07 per litre.

The International Energy Agency (IEA), in its study The Role of E-fuels in Decarbonising Transport, shares a similar outlook. The IEA acknowledges that e-fuels are currently expensive but suggests that the cost gap between e-fuels and fossil fuels could significantly narrow by 2030.

With the expansion of electrolyser projects and the optimisation of renewable energy sources, the cost of e-kerosene could fall to $50 per gigajoule ($2,150 per tonne), making it competitive with sustainable aviation fuels derived from biomass. E-methanol could reach $35 per gigajoule ($700 per tonne), while e-ammonia could drop to $30 per gigajoule ($550 per tonne), bringing them in line with the highest fossil fuel prices recorded between 2010 and 2020, thereby enabling their adoption in maritime transport.

Even in 2030, the IEA predicts that low-emission e-fuels will have a limited effect on transport costs. A 10% blend of e-kerosene would increase airline ticket prices by only 5%. While e-methanol and e-ammonia are cheaper to produce, they require substantial investment in infrastructure and specialised ships. The total cost of ownership of a container ship powered entirely by these fuels would be 75% higher than that of a conventional ship. However, this would still account for less than 1% of the value of the goods transported.

The foundation of e-fuels lies in power-to-liquid (PtL) processes, which convert renewable electricity into liquid fuels. Hydrogen is extracted from water — which can be sourced from the sea and desalinated — through electrolysis, powered by renewable energy. It is then synthesised with carbon dioxide through the Fischer-Tropsch process, resulting in a liquid fuel. This fuel can be blended with petrol, diesel, or heating oil, or used as a fully carbon-neutral alternative to replace all current fossil-based liquid fuels.