According to WoodMac, e-fuels offer long-term solutions for key transport sectors related to the energy transition

KUALA LUMPUR (June 21): Widespread development and use of synthetic fuels will take at least another decade and will depend on the successful implementation of other technologies, according to the latest Horizons report from Wood Mackenzie (WoodMac).

In a statement on Thursday, WoodMac said e-fuels provide a synthetic alternative to fossil fuels and could decarbonize sectors that are difficult to electrify without first scrapping long-lived equipment.

It said this meant e-fuels could provide a solution to power key transport segments such as ships, long-range aircraft and heavy commercial vehicles.

The WoodMac Horizon report shows that e-fuels, also known as electrofuels, synthetic fuels, Power-to-X (PtX), Power-to-Liquids (PtL) and renewable fuels of non-biological origin (RFNBO), are being produced. by combining electrolytic (green) hydrogen, produced by electrolysis of water using renewable energy, with captured carbon or nitrogen.

It said e-fuel can be considered carbon neutral if the emissions released into the atmosphere when it burns are equal to (or less than) the captured CO2 used to produce it.

WoodMac’s vice president of hydrogen research, Murray Douglas, said identifying pathways from traditional fuels to low-carbon alternatives is a perennial challenge for incumbent energy players.

“E-fuels offer businesses an intriguing prospect at the intersection of electrons and molecules, and the potential to leverage existing technical, commercial and marketing opportunities makes it an attractive, if challenging, opportunity for many,” he said.

The WoodMac report also stated that a key challenge in scaling up e-fuel production is commercial viability, as the costs of producing green hydrogen and capturing CO2 are high.

The subsequent conversion process to the final e-fuel product was found to be both energy and capital intensive and delivery costs should therefore be taken into account.

Douglas said there is no shortage of buyers looking for low-carbon fuels, but the gap between production costs and willingness to pay is significant.

“Each e-fuel has a dominant fuel it is intended to replace, and they are all much cheaper, and that means their success will be dictated by policies that mandate volumes, charge emissions costs and lower production costs,” he said.

Douglas added that current conversion technologies vary depending on the target e-fuel desired, but the key challenge for all of them is the integration of green hydrogen, carbon or nitrogen and then their conversion in a large-scale commercial e-fuel production facility.

He said that e-fuels are undoubtedly one of the long-term elements of the energy transformation.

“But the companies that are the quickest to set strategic direction can position themselves to capture the most attractive elements of the value chain and leverage what they learn moving forward,” Douglas said.