E-fuel production should focus on aviation and maritime transport

Berlin, 22 May 2023: When scaling up the production of electricity-based synthetic fuels – otherwise known as “e-fuels” – policymakers and business leaders across the globe should focus on applications that lack climate-neutral alternatives. In the transport sector, this means that e-fuel production should be preferentially dedicated to aviation and maritime transport. This is a key takeaway of a new study by the German climate policy think tank Agora Verkehrswende and the International PtX Hub. The paper summarises the current state of knowledge on the potential of e-fuels to power the energy transition in transport.

According to the study, relying on e-fuels will not be a viable option for passenger cars and most commercial vehicles. A battery-electric vehicle only consumes one-sixth of the renewable electricity required by a combustion vehicle running on e-fuels. Electric vehicles must therefore remain the first choice for decarbonising road transport.

“Any serious strategy for the development of e-fuels that considers both economic efficiency and climate protection must lay a focus on the preferential allocation of e-fuels to aviation and maritime shipping,” says Wiebke Zimmer, Deputy Director of Agora Verkehrswende. “The political groundwork for the development of global production must be laid now, and should be informed by clear priorities and international collaboration. E-fuels can represent a valuable supplement to the direct use of renewable electricity in transport – but they are not a full-fledged alternative.”

According to current forecasts, meeting demand for e-fuels in aviation and maritime transport alone will pose a major challenge. Global production of electricity-based sustainable aviation fuels in 2030 is projected to correspond to just 3% of current jet fuel demand in the EU, while projected e-methanol production in 2030 is anticipated to reach 5% of current European marine fuel demand. Compared to these limited production capacities, the EU has set ambitious market penetration rates for the coming decade: an e-fuel share of at least 2% is to be achieved in European air and maritime transport by 2032 and 2034, respectively.

Energy efficiency must remain a top priority – even in “sweet spot” regions

Even if e-fuel production is developed in “sweet spot” regions with highly favourable production conditions, energy efficiency and sustainability will need to remain top priorities. This means the raw materials for production – electricity, carbon dioxide, and water – must be provided in a greenhouse gas-neutral manner. Large quantities of renewable electricity (typically wind and solar) are needed not only for the production of hydrogen from water (electrolysis), but also for the extraction of carbon dioxide from the atmosphere (through direct air capture), and – especially in sunny, arid regions – for the desalination of seawater.

According to the study, the socioeconomic aspects of global e-fuel production are no less important. Specifically, e-fuel production for export should not come into conflict with domestic energy needs or economic development, and the interests of local populations must be considered. In this connection, an important task is to establish widely recognized standards for e-fuels production that ensure social, economic, and ecological sustainability.

“The production of e-fuels requires valuable inputs such as land, water, and labour,” Ulf Neuling, a Senior Associate at Agora Verkehrswende, observes. “Social, economic, and ecological criteria must therefore be taken into account not only through the signing of cooperative agreements, but also through the adoption of international standards. Only then can e-fuels become part of a sustainable future.”

E-fuels: Separating the substance from the hype

The discussion paper “E-fuels: Separating the substance from the hype – How electricity-based synthetic fuels can contribute to the energy transition in transport” is available for download free of charge at https://www.agora-verkehrswende.de/en/publications/e-fuels-separating-the-substance-from-the-hype/.

About Agora Verkehrswende

Agora Verkehrswende is a Berlin-based think tank that seeks to promote climate-friendly mobility. Non-partisan and non-profit, it works together with key stakeholders in the fields of politics, business, academia and civil society to decarbonise the transport system. To this end, the think-tank team develops evidence-based policy strategies and recommendations. Agora Verkehrswende was initiated in 2016 by Stiftung Mercator and the European Climate Foundation. www.agora-verkehrswende.de

About the International PtX Hub

The International Power-to-X Hub is a knowledge and exchange platform to accelerate market development of sustainable Power-to-X on a global scale. It is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Affairs and Climate Action (BMWK). ptx-hub.org