E-Fueling for the Future

The development of carbon-neutral e-fuels enjoyed a major boost from European regulators, but production cost and scale remain issues.

May 1, 2023

Bill Visnic

A bottle of e-fuel developed by Karlsruhe Institute of Technology’s Institute for Micro Process Engineering. (Amadeus Bramsiepe, KIT)

Synthetic and bio-based liquid “e-fuels” have in various forms enjoyed fits and starts of industry attention and R&D investment in recent years, but got the most significant boost ever in March 2023 when a politically charged deal between the European Union and Germany brokered an exemption in the EU’s mandate for sales only of EVs starting in 2035. The agreement allows manufacturers to continue selling internal-combustion models after the 2035 deadline – but only if they run on carbon-neutral e-fuels.

Porsche’s sustainability team leader Karl Dums displays a bottle of e-fuel. (Porsche)

In an instant, e-fuels were guaranteed a market all to themselves. It remains to be seen whether e-fuels – at least in their current state of technology – can answer the call. But as some supporters enthused after the EU’s escort of e-fuels into the post-EV landscape, developers have more than a decade to address technical challenges and concerns about production cost and scale.

Maybe most critically, the lifeline that e-fuels represent for internal combustion assures that IC propulsion remains at least “legally” acceptable should EVs not prove to be the expected transportation-sector climate panacea. It remains to be seen whether other climate-concerned entities such as the state of California see the EU’s strategy as pragmatic or merely procrastinating, but e-fuel R&D certainly has a new mandate: Germany’s Transport Minister Volker Wissing said Europe’s new e-fuels deal presents “opportunities for Europe by preserving important options for climate-neutral and affordable mobility.”

Porsche spearheads e-fuel production

At the moment, Porsche is at the vanguard of e-fuel development as the majordomo of what currently is the most ambitious and mature e-fuels production project in Punta Arenas in the Patagonian region of Chile. The site was selected largely due to the presence of strong wind an average of 270 days per year that allows windmills to operate “at full capacity.” The electricity generated from the windmills is vital to the production process’ guarantee of creating e-fuel that Porsche pragmatically claims allows the “nearly CO2-neutral operation of petrol engines.”

The process at the site Porsche calls Haru Oni and it is the manifestation of investment from a variety of partners that include ExxonMobil and Siemens Energy. The facility owner is Santiago, Chile-based HIF Global. The HIF process uses wind power – from a 3.4-megawatt Siemens-manufactured windmill – for electricity to obtain hydrogen from water via electrolysis. Wind energy also powers system that captures CO2 from the atmosphere in a direct air-capture process; the CO2 is combined with the hydrogen obtained from electrolysis to create liquid methanol. The methanol is superheated and run over an ExxonMobil-developed catalyst that converts it into synthetic gasoline.

“We will only meet our ambitious decarbonization goals if we factor currently existing vehicles into the decarbonization effort as well and operate them as close to net carbon neutral as possible,” said Karl Dums, senior manager and sustainability team leader at Porsche AG, in a company interview. He asserted that e-fuels are the same as petroleum-based fuels in their fundamental properties, but are nearly carbon-neutral. “Porsche was one of the first companies to address the issue [of continuing the use of IC engines running on e-fuel] on political, regulatory and business levels – and we wanted to communicate that from the outset and create incentives for other companies to get involved.”

The pilot phase of the Haru Oni plant is earmarked to produce 130,000 liters (34,342 gal.) of e-fuel, said Porsche. All of that capacity is directed to be used in the Porsche Mobil 1 Supercup racing series and at Porsche’s Experience Centers. Porsche, which in 2022 invested $75 million in HIF, said it expects to hike e-fuel production at Haru Oni to 55 million liters (just more than 14.5 million gal.) and 550 million liters (145 million gal.) just two years later.

In April 2022, HIF announced a site in Matagorda County, Texas for its first North American efuels facility. The company projected some 200 million gal. of e-fuel-derived gasoline will be produced annually when the production site, which represents a $6-billion investment, is fully operational. Construction was scheduled to being in 2023.

Expanding reach

All of the pilot production of e-fuel-derived gasoline from the Chilean Haru Oni project is earmarked for Porsche’s Mobil 1 Supercup racing series and for Porsche Experience facilities. (Porsche)

The automotive sector is not the only potential target for e-fuels. There is expanding interest in the aviation and shipping sectors, both of which cannot be efficiently transitioned to electrification with contemporary battery technology. In 2021, a commercial KLM airlines flight represented what was claimed as a world-first commercial-aviation use of synthetic fuel to transport passengers from Amsterdam to Madrid. The aircraft mixed conventional aviation gasoline with 500 liters(132 gal.) of synthetic kerosene produced by Royal Dutch Shell in a carbon-hydrogen synthesis process similar to that of HIF.

Major auto-component suppliers such as Bosch, ZF and Mahle in Germany and Europe are members of the eFuel Alliance industry coalition, as are oil and gas majors from ExxonMobil to Repsol and energy developers such as Siemens Energy. The Alliance’s website indicates more than a dozen e-fuel projects are underway on five continents.

Meanwhile, BMW has invested $12.5 million in e-fuel startup Prometheus Fuels and Germany’s Copernicus Project, engaging researchers and industry to transition the country to a carbon-neutral economy by 2025, is actively engaged in e-fuel development, largely through is P2X (power to everything) research to transfer electricity to other energy carriers. Among other things, the P2X program is trying to develop water-splitting electrolyzers that reduce or eliminate expensive iridium without sacrificing conversion efficiency that today is around 65%.

At the moment, all efuels are titanically costly – and processes comparatively inefficient. An early stage in Copernicus’ P2X reportedly requires 10 kW of electricity to produce about seven liters (1.85 gal.) per day. A near-term goal is said to be 1600 liters (423 gal.) from a megawatt (1000 kW).

Porsche’s initial estimate of a cost of 10 euros per liter equates to approximately $45 per gal. – and that is cost, not price to the end user. Fine for boutique use, but still out of reasonable range, even for regions with high costs for today’s petroleum fuels. Scale and increased efficiencies are projected to reduce the cost by a factor of five or more, according to a Porsche executive in a public statement. The eFuel Alliance, perhaps not surprisingly endorses a ten-year tax break for hydrogen and efuel proposed by the European Commission to help ease initial cost stressors.