6/22/2021 Can E-Fuels Save the Combustion Engine?

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JOURNAL REPORTS: ENERGY

Can E-Fuels Save the Combustion Engine?

Proponents say they should be part of a low-carbon future. But cost and efficiency remain hurdles.

Synthetic fuels that are virtually carbon-neutral versions of gasoline, diesel and kerosene could
extend the life of combustion engine technology.
PHOTO: WSJ

By
Giulia Petroni and Dieter Holger
Updated May 15, 2021 1:00 pm ET

Listen to Article  (10 minutes)

Maybe the combustion engine isn’t dead after all. Synthetic fuels are attracting growing
interest as a way to make industries ranging from jets to ships to cars greener without
having to rethink or replace their traditional engines.

Known as electrofuels or e-fuels, these synthetics are made by mixing hydrogen derived
from renewable sources usually with captured carbon dioxide to create a virtually carbon-
neutral version of fuels such as gasoline, diesel and kerosene.

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Some airlines, cargo shippers and oil companies already have pilot projects under way to
produce e-fuels, or are experimenting with blends of e-fuels and conventional fuels. Auto
makers also are investing in the technology, with some saying e-fuels could be a way to
keep older passenger cars on the road, alongside electric and hybrid vehicles, as a cleaner
form of transportation.

Cost hurdles
The technology underlying e-fuels isn’t new. Nearly a century ago, German scientists
Franz Fischer and Hans Tropsch invented a method, known as Fischer-Tropsch synthesis,
that mixes carbon monoxide with hydrogen to create synthetic petroleum.

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Synthetic fuels have many advantages, according to supporters: They can be blended with
conventional fuels—density and quality are similar—or replace them completely without
altering existing pipelines, refilling stations and engines. They also can be easily
transported and stored for extended periods.

Cost, however, remains a big hurdle.

E-fuels are getting a fresh look because renewable-energy prices have fallen to record
lows, and governments and companies world-wide are increasing investments in green
hydrogen and carbon-capture technology—the elements needed to make e-fuels. But at
this early stage of development, e-fuels are still four to six times as expensive to produce
as conventional fuels before taxes, according to the eFuel Alliance trade group.

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Many say the future of e-fuels could hang on whether governments adopt or increase
taxes on greenhouse-gas emissions—which would make conventional fuel more expensive
—and encourage green-hydrogen production through government funding and subsidies.

If they do, oil-and-gas firms should be able to supply enough captured CO2 to make e-
fuels. Fossil fuels are expected to account for a big part of the world’s energy mix even in
2050, and by building out carbon-capture technology, big oil companies could continue to
produce fossil fuels while responding to calls to address climate change.

Some oil giants are making bets already. In Spain,

Repsol SA
is investing 60 million euros,
equivalent to about $72 million, building a synthetic-fuels plant that uses CO2 captured
from a nearby oil refinery in Bilbao. The plant, expected to go online in 2023, will produce
50 barrels of e-fuel a day during the pilot phase, then eventually scale up for commercial
distribution of e-fuels for the transportation sector.

U.S. oil-and-gas giant

Exxon Mobil Corp.
also sees an opportunity in e-fuels. This year, it
pledged to invest $3 billion through 2025—roughly 3% to 4% of its planned annual capital
expenditure—on lower-emission technologies such as carbon capture and storage. The oil
giant also began working with
Porsche
this year to test e-fuels for cars.

“E-fuels have an enormous potential,” says

Andrew Madden,
vice president of strategy
and planning for Exxon Mobil Fuels & Lubricants. “As we get the [carbon capture]
technology matured, we can tie them together where it makes sense.”

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How E-Fuels Are Made

E-fuels are synthetic fuels manufactured using hydrogen from renewable sources and usually captured
carbon dioxide or other sources of carbon. They include a wide range of low-carbon fuels.

Renewable electricity such as wind

and solar enters the grid to power
the electrolyzer.

OXYGEN

ELECTROLYSIS

The electrolysis process, which

splits water into oxygen and
Green hydrogen is
hydrogen, allows the
combined with
production of green hydrogen—
captured carbon
hydrogen created from
dioxide through
renewable sources.
usually one of two
methods—called HYDROGEN
Fischer Tropsch or
methanol synthesis—
which use a series of
chemical reactions to
convert the mixture
into liquid
hydrocarbons or e-
methanol,
respectively. CO2 can
be captured from
industrial processes,
power generation or CAPTURED CO2
directly from the air.

RESULT APPLICATIONS
E-FUELS

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Green hydrogen Road: E-diesel,

is converted into e-gasoline or e-
a liquid energy methanol, for example,
carrier—a can be mixed with
process called conventional fuels or
“power to replace them entirely to
liquid”—that can power vehicles.
be stored and
transported.

Aviation: E-kerosene can be blended Heating: E-fuels can be used to

with fossil-based kerosene or even be power heating systems originally
used purely to power current aircraft. designed to run on oil or natural gas.

Maritime: E-ammonia, e-methanol or Industrial manufacturing: All

e-diesel are all suitable options to products coming from fossil
power vessels for long-distance refineries can potentially be
maritime transport. converted into e-fuels and used for
industrial processes.

Source: WSJ;

Kevin Hand/THE WALL STREET JOURNAL

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Ships and planes

In the near term, aviation and maritime shipping companies may be the most likely
buyers of synthetic fuels because their businesses are carbon-intensive and hard to fully

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6/22/2021 Can E-Fuels Save the Combustion Engine? - WSJ

electrify. The high energy density of e-fuel also could make it a good decarbonization
solution for heavy-duty trucks that haul cargo over long distances, proponents say.

In January, KLM Royal Dutch Airlines powered a commercial flight from Amsterdam to
Madrid with synthetic fuel, a world first. The aircraft used regular fuel mixed with 500
liters of synthetic kerosene produced by Royal Dutch Shell PLC.
Airbus
SE, too, is looking
at synthetic fuel as it seeks to develop the world’s first zero-emissions commercial
aircraft, which could be in service by 2035.

In 2019, German airline Deutsche

Lufthansa AG
signed a deal for the Heide Refinery in
Germany to produce and supply the Hamburg airport with synthetic kerosene. The aim is
to replace 5% of the fossil-based kerosene used to fuel jets at the airport with synthetic
kerosene as early as 2024 through wind energy generated locally.

The chief executive of the refinery sees applications for e-fuels in the chemical industry,
too, saying e-fuels could slash the carbon footprint of the plastics industry and the
emissions generated from producing goods ranging from smartphones and laptops to
shampoo bottles and toys.

“The application of them is just so vast and basically in all the materials we are using day-
to-day,” says
Jürgen Wollschläger,
Heide’s CEO.

Shipping giant
A.P. Moller Maersk
A/S, meanwhile, sees e-methanol and e-ammonia as a
promising way to power its fleet in the future and says customers have indicated they
would be willing to pay more for green shipping as they seek to reduce emissions in their
supply chains.

“The dialogue we’re having with our customers is promising,” says

Morten Bo
Christiansen,
vice president and head of decarbonization at Maersk. “The technology is
proven, mature and it can be scaled. There’s a huge investment cycle in front of us.”

Maersk has said that it will have its first carbon-neutral vessel in operation by 2023 and is
exploring e-methanol to power it. The company also is collaborating with the investment
firm Copenhagen Infrastructure Partners and some Danish companies to build Europe’s
largest green ammonia facility in Esbjerg, on the Danish west coast.

How green is it?

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Much of the recent buzz around e-fuels has centered on autos, with some car makers
looking at e-fuels as an additional route to environmentally friendly travel, along with
electric and hybrid technologies.

Porsche said last year that it is investing roughly 20 million euros in a synthetic-fuels
plant in southern Chile, where wind power is naturally abundant. It plans to test the fuels
first in its racing fleet and later in sports cars like the 911.

The company predicts the big cost gap between e-fuels and fossil fuels could narrow
significantly in the next five years, depending on government taxes and subsidies. A tax
on carbon would raise the cost of fossil fuels and drive an increase in renewable energy,
which is needed to produce the green hydrogen used in e-fuels.

“If regulators put a cost on carbon emissions, e-fuels can potentially be a very competitive
way to decarbonize,” says
Michael Steiner,
member of the executive board for research
and development at Porsche.

Mr. Steiner says the liquid nature of e-fuels makes them easy to store and transport to
cities and regions where renewable energy is scarce, or where grid accessibility
challenges the development of electric vehicles on a large scale.

Some point out that EVs aren’t without environmental concerns of their own, including
mining to extract lithium for batteries, as well as battery waste in the absence of highly
developed recycling systems.

Christian Schultze,
director of research and operations at Mazda Motor Europe’s R&D
center, says synthetic fuels could make older vehicles cleaner, significantly speeding up
the reduction of CO2 emissions.

“The problem with emissions isn’t on the engine side; it’s on the fuel side,” he says. “Why
do you want to scrap the internal combustion engine if I tell you we can make it extremely
clean?”

Critics, however, say vehicles running on e-fuels will never be as green as electric
vehicles, partly because a great amount of energy gets lost during the process of
converting electricity into liquid or gaseous fuels.

“There is little chance that burning e-fuels in an inefficient internal combustion engine
could be a cheaper or more practical transport decarbonization solution than electric

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vehicles,” says
Stephanie Searle,
fuels program director at the International Council on
Clean Transportation.

Moreover, because renewable energy is the essential prerequisite for low-carbon e-fuels,
there needs to be a substantial increase in renewable production to make e-fuels a reality
on a larger scale.

For now, capacity of e-fuels is very limited.

Geert Decock,
electricity and energy manager at Transport & Environment, a nonprofit
promoting sustainable transportation in Europe, says the firm recently wanted to test e-
fuels in a combustion-engine vehicle, but couldn’t buy 500 liters (132 gallons) of it.

The first step to making the technology a reality is to scale up refueling infrastructure, he
says. “Get ports ready. Hydrogen hubs. Ammonia storage facilities,” he says. “That’s the
kind of focus we want in the next decades, to roll out some of the infrastructure and get
the costs down.”

Ms. Petroni and Mr. Holger are reporters for The Wall Street Journal in Barcelona. Email
them at [email protected] and [email protected].

Corrections & Amplifications

An earlier version of the graphic accompanying this article incorrectly labeled a container
of e-fuels as liquid hydrogen. (Corrected on June 1.)

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6/22/2021 Can E-Fuels Save the Combustion Engine? - WSJ

Appeared in the May 17, 2021, print edition as 'The Promise and Pitfalls of E-Fuels.'

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