WoodMac: E-fuels can offer solution to power critical transportation segments

E-fuels can offer a solution to power critical segments of transportation such as ships, long-haul aircraft and heavy-duty commercial vehicles, but the journey needs to start now, a Wood Mackenzie (WoodMac) report said.

E-fuels, also known as electrofuels, synthetic fuels, power-to-x (PtX), power-to-liquids (PtL) and renewable fuels of non-biological origin (RFNBOs), are produced by combining electrolytic (green) hydrogen, made by electrolysing water using renewable electricity, with captured carbon or nitrogen, WoodMac explained, noting that an e-fuel can be considered carbon neutral if the emissions released into the atmosphere during its combustion are equal to (or less than) the captured CO2 used to produce it.

The report ‘Adding fire to e-fuels’ stated that the widespread development and use of e-fuels is still at least a decade away and depends on the successful deployment of other technologies, but companies that position themselves now are best positioned for success.

Murray Douglas, Vice President of Hydrogen Research at Wood Mackenzie, remarked: “E-fuels offer companies an intriguing prospect at the intersection of electrons and molecules and the potential to capitalise on existing technical, commercial and marketing capabilities makes it an appealing, if challenging, opportunity for many.”

The report pointed out commercial viability as the key challenge in scaling up e-fuel production with green hydrogen production and CO2 capture costs both high.

Douglas said: “There is no shortage of offtakers seeking low-carbon fuels, but the gap between cost of production and willingness to pay is sizeable. Each e-fuel has an incumbent fuel it aims to displace, all of which are much cheaper and this means their success will be dictated by policy to mandate volumes, place a cost on emissions and lower production costs.”

The report claimed that, currently, “most e-fuel proposals aim to source CO2 from a variety of feedstocks with biogenic sources with a low cost of capture, such as biogas and ethanol plants, dominating. But as the production of e-fuels grows the available molecules from such facilities will become scarcer and more dispersed. Costs will rise as e-fuel producers scour for feedstock while looking to scale.” As per the report, this means that, in the long term, “global policy makers will have to set the standards for where e-fuel producers source CO2.”

Douglas concluded: “E-fuels are undoubtedly one of the longer-term plays in the energy transition. However, companies that set a strategic direction quickest can position themselves to capture the most attractive elements of the value chain and take those learnings forward.”