Executive summary

The rapid deployment of low-emission fuels is crucial for transport decarbonisation. While road transport benefits from fuel efficiency improvements and electric vehicles, aviation and marine sectors remain reliant on fuel-based solutions. E-fuels, derived from electrolytic hydrogen, could scale up by 2030, supported by cheaper renewable electricity and reduced electrolyser costs. This report provides a techno-economic assessment of e-fuel technologies, aiming for a 10% share in aviation and shipping by 2030. E-fuels, complementing sustainable biofuels, can utilise existing infrastructure, but currently face high production costs. Significant cost reductions are expected by 2030, making e-fuels competitive with fossil fuels and biofuels.

Chapter 1: Introduction

The report introduces the potential of e-fuels in decarbonising transport, particularly in sectors less amenable to electrification. E-fuels, produced from low-emission hydrogen and carbon inputs, offer a complementary solution to sustainable biofuels. The introduction highlights the necessity of significant cost reductions and infrastructure investments to achieve a 10% share of e-fuels in aviation and shipping by 2030.

Chapter 2: Decarbonisation trends

This chapter explores transport fuel demand, tracking progress in decarbonisation, and the role of biofuels. It underscores the need for diverse decarbonisation options, with e-fuels being a viable pathway due to their compatibility with existing infrastructure and potential for cost reduction .

Chapter 3: Status and outlook

E-fuels, including e-kerosene, e-methanol, and e-ammonia, are assessed for their current status and future outlook. The chapter discusses announced projects, geographic distribution, and the policy environment. The European Union, United States, and other regions have incorporated e-fuels into their hydrogen strategies. Policies like the EU’s Renewable Energy Directive and ReFuelEU Aviation legislation set specific e-fuel targets, promoting their development. Technical standards and GHG emission guidelines are critical for integrating e-fuels into existing systems .

Chapter 4: Production costs

The cost of e-fuel production depends on factors like electrolyser and electricity prices, heat integration, and CO₂ feedstock costs. Captive renewables, such as wind and solar PV, play a significant role in reducing costs. Innovations in electrolyser efficiency and new pathways for e-fuel production are necessary for achieving cost competitiveness by 2030. Current estimates suggest that e-kerosene could reach USD 50/GJ, e-methanol USD 35/GJ, and e-ammonia USD 30/GJ .

Chapter 5: Deployment analysis

This chapter analyses the deployment of e-fuels in aviation and shipping, aiming for a 10% share by 2030. It examines the cost impact, infrastructure needs, and potential synergies with biofuels. For aviation, the production of e-fuels also results in e-gasoline as a by-product. Shipping requires significant investments in transport, storage, and distribution infrastructure .

Chapter 6: Resource requirements

Achieving the deployment targets for e-fuels necessitates substantial resources, including low-emission electricity, electrolyser capacity, and CO₂ feedstock. The chapter discusses the bulk materials, critical minerals, and land requirements, highlighting the expected lead times for project development. Historical examples suggest that rapid deployment is feasible with sufficient demand and investment .

Chapter 7: Policy considerations

Robust policies are essential to stimulate demand for e-fuels, support innovation, and develop infrastructure. Key policy areas include strengthening transport GHG reduction targets, providing support for low-emission fuel demand, and developing international standards. Policies should also address the challenges faced by emerging economies, fostering investment and technology transfer .

Recommendations

The report recommends enhancing GHG reduction targets, supporting demand-side policies, and stimulating electrolyser cost reductions. It emphasises the need for international standards, addressing emerging market challenges, and early infrastructure planning. Fostering innovation through R&D and exploring synergies with biofuels are also crucial .