The role of electrofuels: A cost-effective solution for future transport?

Report, 2017

Electrofuels (also known as e.g., power-to-gas/liquids/fuels, e-fuels, or synthetic fuels) are synthetic hydrocarbons, e.g. methane or methanol, produced from carbon dioxide (CO2) and water with electricity as primary energy source. The CO2 can be captured from various industrial processes giving rise to excess CO2 e.g. biofuel production plants, and fossil and biomass combustion plants. Electrofuels are interesting at least for the following reasons: (i) electrofuels may play an important role as transport fuels in the future due to limitations with other options and are potentially of interest for all transport modes, (ii) electrofuels could be used to store intermittent electricity production, and (iii) electrofuels potentially provide an opportunity for biofuel producers to increase the yield from the same amount of biomass. The overall purpose of this project is to deepen the knowledge of electrofuels by mapping and analyzing the technical and economic potential and by analyzing the potential role of electrofuels in the future energy system aiming to reach stringent climate targets. The specific project targets include: (i) Mapping of the technical potential for CO2-recovering from Swedish production plants for biofuels for transport and combustion plants. (ii) A review and analysis of different electrofuel production pathways and associated costs and an overall comparison with the production cost of other renewable transport fuels. (iii) An analysis of the potential conditions under which electrofuels are cost-effective compared to other alternative fuels for transport in order to reach stringent climate targets. Main conclusions are: (1)Electrofuels used in combustion engines demand significantly more energy compared to battery electric vehicles and hydrogen used in fuel cells, (2) Compared to biofuels, our estimates of the production costs of electrofuels are in the same size of order but in the upper range or above, (3) The results of the energy system modelling indicate that electrofuels is not the most costefficient option for road transport. Thus, it is not likely that electrofuels can compete with current conventional fuels in road transportation (unless there are higher taxes on fossil CO2-emissions), (4) Under some circumstances (e.g., when assuming relatively high costs for other options), electrofuels may be able to complement battery electric vehicles and hydrogen used in fuel cells in a scenario reaching almost zero CO2 emissions in the global road transport sector, (5) The cost-competitiveness of electrofuels depends on e.g. the availability of advanced CO2 reduction technologies such as CCS, and costs for the competing technologies, but also on the costs and efficiencies of synthesis reactors and electrolysers for the electrofuel production as well as the electricity price, (6) In the short term, renewable CO2 does not seem to be a limiting factor for electrofuels. However, the demand for renewable electricity represents a possible limiting factor especially in the case of large-scale production of electrofuels. The production cost may also represent a challenge.