Electrofuels may have a strong profile in transport decarbonisation, but the stubbornly high cost and the infrastructure challenge is holding things back, according to Murray Douglas, Head of Hydrogen Research at Wood Mackenzie.
“Hydrogen needs to be below $1.50 per kg for e-fuels to work, and we’re nowhere near that,” Douglas told gasworld in interview for gasworld Global’s March issue.
What’s more, aviation fuels are particularly affected by these cost issues. Douglas said that eSAF might not now be commercially viable at scale until the 2040s. That is years behind where SAF adoption needs to be for Net Zero to be hit.
Shipping could see earlier adoption of e-methanol and ammonia, but here Douglas noted that concerns around safety and infrastructure persist.
For e-fuels to gain traction, Douglas said that government policies from here would be critical.
The EU’s FuelEU Maritime and ReFuelEU Aviation regulations are mandating reductions in emissions, but whether industry can scale in time is uncertain. “We would characterise these as well-structured policies that can support delivery, but they require no wavering,” he said.
Japan, by contrast, is using Contracts for Difference (CFDs) to encourage e-fuel development, particularly e-methane blending into its LNG mix. In the US, the Inflation Reduction Act has positioned the country as a leader in hydrogen development through the 45V tax credit, but policy uncertainty is now with us. More will be known by May if not sooner.
Among hydrogen-based e-fuels, e-methanol appears to have the strongest near-term prospects, particularly for shipping, said Douglas.
Read the full interview here.
