Renewable electricity-based fuels and chemicals: demand, trading, and transportation

Abstract

Achieving global climate targets and limiting global warming to below 1.5°C requires a major transition of the fossil fuel-based energy system. Renewable energy offers a viable alternative with significantly lower greenhouse gas and air pollutant emissions. While direct electrification benefits power, heat, and road transport, hard-to-abate segments in industry and long-range transport will rely on renewable electricity-based fuels and chemicals (e-fuels and e-chemicals).

This dissertation explores the role of these energy carriers in the global transition to 100% renewable energy. It investigates the value of global e-fuel trade, the impact of transportation infrastructure costs on import viability, and the emerging role of CO2 as a valuable feedstock. A methodological combination of techno-economic analysis, case studies, and energy system modelling is used.

The findings suggest that by 2050, the demand for e-fuels will have increased significantly, with 23-32% of global demand traded across regions. Trading can reduce fuel costs by 2-8% globally, depending on the year and the fuel, and by up to 38% for individual countries. Producing e-fuels at scale will require 6.1 GtCO2 annually by 2050, of which around 40% could be sourced from sustainable and unavoidable point sources, including cement plants, pulp and paper mills, and waste incinerators, and the rest must be captured from air. A Nordic case study demonstrated that integrating point source CO₂ capture can reduce system costs, improve resource efficiency, and generate socioeconomic benefits. The dissertation also examines the costs of transporting ehydrogen and e-methanol via ships and pipelines. While long-distance transport of ehydrogen from solar-rich regions of Morocco and Chile to Europe may not be competitive with local production, e-methanol imports may be economically viable.

In conclusion, the research highlights the importance of strategic planning for e-fuel production, infrastructure development, and CO2 sourcing to enable cost-effective scaleup of green e-fuels and e-chemicals.