July 15. 2024. 7:08

The Daily

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E-fuels: as much import as necessary, as sustainably as possible

At the beginning of June, the Federal Ministry of Transport in Germany organised an international meeting on the topic of e-fuels for the second time with the participation of representatives from many member states of the European Union.

After last E-Fuels Conference focused on the use of synthetic fuels in road transport, this year’s E-Fuels Dialogue was devoted to air transport.

This reorientation points in the right direction, because unlike in road transport, for the time being there will be no climate-neutral alternatives to electricity-based synthetic fuels in aviation or maritime transport.

E-fuels are a rare and precious commodity. Even for essential applications like air travel, the projected global production capacities are insufficient, meeting only around three percent of European kerosene demand by 2030.

Yet, with the EU targeting climate neutrality by 2050 and Germany by 2045, it is all the more important to rapidly advance the production of e-kerosene, paying attention to energy efficiency and set appropriate priorities in the development of funding instruments and the regulatory framework for e-fuels.

The challenges associated with the global development of e-fuel production have hardly been addressed to date. The so-called sweet spot regions, such as Southern Africa, South America, and Australia, boast abundant wind and solar resources that enhance production efficiency and reduce costs. However, in view of the enormous demand, it is also important to use resources carefully in future hydrogen and e-fuel exporting countries.

Renewable electricity for hydrogen production requires extensive and suitable land, often assumed to be widely available. However, decisions about land use should involve local populations.

Moreover, it is crucial to address electricity and water access for hydrogen production alongside sovereignty and land concerns. In many potential producer countries there is either no efficient power supply for the population or the power supply is based on fossil-fueled power plants with poor efficiency.

In some sweet spot regions with high levels of solar radiation, the risk of water shortages is also considered to be high.

Finally, ensuring local populations benefit from renewable energy exports is crucial for sustainable economic development. Otherwise, the global trade with e-fuels could hinder rather than aid a country’s economic growth – for example, if production is not sufficiently linked to the local economic structures or the revenues do not benefit the region.

Safeguarding human rights in accordance with UN and OECD guidelines should be a top priority. Complaints mechanisms can, for example, help to ensure that the needs of the local population are better taken into account – according to the principle that where investments are made, the people affected in a region must be informed in advance and must give their free consent by majority vote.

The general public should also benefit from investments in energy generation and water treatment. To this end, governments could link the authorisation of e-fuel projects to the requirement that companies plan and build additional capacities for the supply of electricity and water to the population.

The projects should involve local labour and companies and, if possible, also include the further processing of hydrogen into e-fuels for air and sea transport. This strengthens value creation in the producing countries.

On the road to climate neutrality, Europe needs large quantities of renewably produced hydrogen and e-fuels from other countries. The respective industry will work best for all sides if it promises benefits for all.

European governments should therefore collaborate with producing countries to establish transparent and equitable frameworks for e-fuel production and export. Harmonising international regulations and standards, as was indeed highlighted at the E-Fuels Dialogue in Berlin, is essential for fostering a sustainable global market.

To achieve these goals, leveraging existing fora and instruments—such as climate agreements, development cooperation, and industry partnerships—is crucial. Entities like the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO) play a pivotal role in shaping global standards for aviation and maritime fuels.

If these instruments and fora are used according to a coherent strategy e-fuels can become part of a socially and ecologically sustainable global economy.

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