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E-fuels represent a potentially powerful contributor to decarbonization in the U.S. transport sector.
By leveraging renewable electricity, e-fuels could reduce lifecycle greenhouse gas (GHG) emissions by 75% compared to fossil gasoline. They are considered drop-in fuels compatible with new and existing vehicles used in aviation, rail, road and shipping. They are also compatible with today’s fueling system equipment.
But, to have a meaningful impact e-fuels need to be commercially available, deployed at a large scale and affordable. According to a recent report released by the Transportation Energy Institute (TEI), their viability in the U.S. hinges on several dependencies. Among them:
1. Renewable Electricity
Successful decarbonization through e-fuels depends on a scenario in which an increase in electricity demand does not yield a net increase in GHG emissions. Of note, e-fuels are currently less efficient in decarbonizing the transport sector because renewable electricity can be used directly in battery electric vehicles (BEVs) with fewer energy losses experienced through the supply chain.
2. Carbon Capture
Although there are many sources of industrial CO2 emissions in the U.S., they are spread across a wide distribution area. The availability of CO2 capture and transport infrastructure affects the amount of CO2 that can be efficiently delivered to e-fuels plants.
3. Federal Policy Support & Funding Incentives
There has been no proposal to include e-fuels in the Renewable Fuel Standard. Without an e-fuel blending mandate, suppliers are unlikely to choose to distribute e-fuels over biofuels. Furthermore, limited Inflation Reduction Act tax credits do little to incentivize production. In fact, the TEI report indicates “the current policy landscape could result in e-fuel producers favoring markets outside of the U.S.”
Learn much more in the TEI report, “E-fuels: Evaluating the Viability of Commercially Deploying E-fuels in Road Transport.”
Introduction to E-Fuels
What are e-fuels? Watch this video from TEI or read this brief overview from a previous edition of SourceLine to learn more.
