Power-to-Liquids Primer: Fuel From Thin Air

By Rose Oates, Renewable Fuels, BloombergNEF

E-fuels made from hydrogen and captured carbon dioxide (CO2) via the power-to-liquids (PtL) process can boast extremely low emissions compared to the fossil fuels they replace, depending on the source of carbon. Moreover, e-fuels don’t face the same challenges as biofuels regarding the availability and sustainability of biomass feedstock. As a result, hard-to-abate transport sectors like shipping and aviation are looking to e-fuels to help them decarbonize. The PtL pathway is set to expand rapidly throughout the 2020s, from a handful of pilot plants in 2024 to a potential global capacity of over one billion gallons per year in 2030.

key e-fuel stats from 2024 to 2030Planned power-to-liquids production capacity through 2030

  • There are several pathways to produce e-fuels. These include the production of syngas followed by either the Fischer-Tropsch process or e-methanol synthesis. The latter can be combined with methanol conversion technology such as methanol-to-jet to produce e-kerosene. These processes differ but always require the same feedstocks: hydrogen and captured CO2.
  • Today, there are only a handful of PtL facilities online and they are mainly at the pilot stage. This number is set to grow rapidly, with over 30 more projects in the pipeline planned to come online by 2030, and several others with unknown start dates, summing to an annual production capacity of over 1.3 billion gallons.
  • Most plants are planned for Europe. However, North America leads in terms of planned capacity, with around 615 million gallons due to come online by 2030 compared to Europe’s 350 million gallons. This is mainly due to one extremely large plant planned by HIF Global for startup in Texas in 2027 – which is more than three times larger than any other planned PtL project.
  • Contrary to the rest of the renewable fuels landscape, which is dominated by oil companies, the PtL landscape consists mainly of startups. These firms are attempting to scale up nascent technology and rely on partnerships and financing. Planned projects are targeting a range of fuels, but e-methanol and e-kerosene are emerging as the two priorities.
  • BloombergNEF expects the scale up of e-fuels will be hindered by cost. By 2050, e-kerosene is likely to still come at a premium compared to conventional jet fuel combined with direct air capture to offset emissions. Cost reductions are dependent on green hydrogen production and captured CO2 technology improvements.

BNEF clients can access the full report here.

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