Date: November 19, 2024 PDF: 9.0 MB
The United States road transportation sector accounts for 22% of US greenhouse gas (GHG) emissions. Policies have been put in place to reduce emissions in the road transport sector – both on a federal and state level in the U.S., as well as around the globe. Many decarbonization technologies are available and are being incentivized under such policies, each facing a unique set of challenges as they are deployed commercially. Amongst these options, e-fuels (or synthetic fuels) are a renewable technology that can be used in existing and new vehicles while potentially yielding near-zero emissions.
However, most e-fuels technologies are at a low level of technological and commercial development today. Key challenges are the technical risks associated with production processes, high costs, and limited policy support to bridge the cost gap with fossil fuels.
To contribute meaningfully to decarbonization across the transport sector, e-fuels will have to become commercially available and be deployed at large scale. This will depend on technical progress, feedstock availability in particular locations, availability of funding, strong policy support, and the speed in which other transport decarbonization options ramp up.
This report evaluates the viability of e-fuels in the U.S., based on their current technical suitability, emission reduction potential, scalability, and economic competitiveness, and how this could change by 2040. It focuses on e-fuels’ potential contribution to the sustainable transition of the road sector and other transport energy sectors.
Some key points that the report covers in detail:
- Why did we conduct the study? To achieve global decarbonization objectives, reducing the greenhouse gas emissions from internal combustion engine vehicles that are currently on the road and that will be sold in the future will be essential. There are 1.5 billion vehicles in the world today and a lower carbon intensity fuel is the only path to mitigate their emissions. New fuel options will be required.
- Why are e-fuels an important option? E-fuels produced for on road transportation vehicles are considered drop-in fuels and can be used just as the market currently uses gasoline, diesel and biofuels, without modification of vehicles or equipment.
- How can e-fuels support GHG emissions reductions? E-fuels could close potential emission reduction gaps or accelerate emission reduction efforts in road transport in the U.S. By leveraging renewable electricity, some e-fuel production pathways could produce drop in fuels for on-road vehicles with a 75% reduction in life cycle greenhouse gas emissions compared with fossil gasoline.
- Will e-fuels be affordable? Whether e-fuels will be supplied to the road transport sector in the U.S. will be largely influenced by policy. Currently, e-fuel production is very expensive and not competitive with other fuels. However, when considering current U.S. policies and global production expectations over the next 15 years, some e-fuels could become competitively priced. How much e-fuel can be produced? By 2040, given the expected increase in commercial production facilities, e-fuel production in the U.S. could increase to 4.7 billion gallons and globally to 27.5 billion gallons.
- Current policy landscape could result in e-fuel producers favoring markets outside of the U.S.
- The strongest demand signals for e-fuels come from the aviation sector but e-fuels could be supplied for both aviation and road transport.
- E-fuels are (and will continue to be) more expensive to produce than their fossil counterparts, making policy support critical for projects to be economically viable.
- Further policy drivers are needed to provide additional confidence for investments in e-fuels and to support their uptake.
What are e-fuels?
E-fuels are renewable fuels produced from water, renewable electricity and carbon dioxide (CO2) via chemical or biochemical processes, which can be used to decarbonize the road, aviation, maritime, and rail sectors.
Why is there growing interest in e-fuels?
E-fuels can achieve up to 75-99% GHG savings compared with fossil fuels, when made from additional renewable electricity (i.e. renewable electricity which meets incrementality, deliverability and temporal correlation requirements).
They are highly compatible with existing infrastructure and vehiclesin the road, aviation, shipping and rail sectors.
E-fuels are produced fromrenewable electricity, carbon dioxide, and water which are highly abundant resources globally.
- Download: Abridged Summary
- Download: Executive Summary
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