CO2-based synthetic fuels are of increasing interest as a potential strategy to reduce petroleum consumption as well as greenhouse gas (GHG) emissions from the transportation sector. The most well-known example of CO2-based synthetic fuels is power-to-liquids, or “electrofuels,” which use captured CO2 and electricity to produce drop-in diesel or gasoline, methanol, dimethyl ether (DME), or other fuels that can be used in vehicles, airplanes, or ships. CO2-based synthetic fuels could potentially be incentivized by EU policies, in particular the recast Renewable Energy Directive to 2030 (RED II).
This study aims to improve our understanding of the potential contribution that CO2-based synthetic fuels could make towards the European Union’s (EU) climate mitigation goals. This study assesses potential production volumes of power-to-liquids that could be economically viable in EU Member States with varying levels of policy support in 2030 and 2040. Four policy scenarios are considered, including scenarios where policy support is provided to CO2-based synthetic fuels only when produced using excess renewable electricity that would otherwise be curtailed, from new off-grid renewable installations, and average electricity from the grid. This study also assesses the lifecycle greenhouse gas (GHG) performance of power-to-liquids in each of these policy scenarios, including accounting for indirect effects of displacing renewable electricity from existing uses. The total GHG impact and level of petroleum displacement that could potentially be achieved by CO2-based synthetic fuels is presented for the EU in 2030 and 2040. This study provides recommendations for incorporating CO2-based synthetic fuels in policies aimed to reduce GHG emissions from transport fuels, vehicles, and the industrial sector in the EU.
Staff contact: Stephanie Searle