Discussion Paper

Executive summary

Chapter 1

Global cooperation is needed to address climate change

Human influence on the global climate system is widely acknowledged and a global cooperation is needed to address climate change - as evidenced by the 196 countries that have signed the Paris Agreement. For the first time, from 2024 there will be common binding minimum standards for reporting by states on their greenhouse gas emissions and climate protection measures. The energy transition to yield climate goals presents both wide-ranging challenges and opportunities for societies around the world. Governments are called upon to promote policies that safeguard competitiveness, economic growth, and employment. They ought to enable companies to use their innovative capabilities to protect the climate and make the transition to a sustainable global economy possible.

Powerfuels are an essential building block for reaching climate targets

Powerfuels are synthetic gases and liquid fuels produced from Power-to-X processes by utilising renewable electricity. Powerfuels are game changers as they enable renewable energy to be stored and transported over long distances. Powerfuels will be a missing link for reaching climate targets due to four key reasons:

  • Powerfuels are climate-friendly solutions to applications with no viable alternatives for fossil-fuel use,
  • they utilize the worldwide potential for renewable energy systems as they can be transported and traded globally,
  • they can reduce the cost of energy transition by utilising existing infrastructures and provide long-term renewable electricity storage options,
  • they could accelerate the de-fossilisation of existing consumer end-use equipment since they are green drop-in alternatives to fossil fuels.

 

The technologies for powerfuel production are market-ready – and costs will fall further with economies of scale

The technologies for production of powerfuels are already demonstrated and tested, however the business models are not available yet, as costs are still high. Electricity costs are the largest portion of powerfuel costs, followed by carbon capture costs (for hydrocarbon) powerfuels and electrolysis of hydrogen. Through economies of scale the costs of powerfuel production technologies could significantly reduce. Sufficient demand for powerfuels could be triggered by policies that recognise the carbon-neutral nature of powerfuels compared to fossil fuels.

An international powerfuels market provides value for everyone - producers, consumers and enabling countries

Countries with abundant and low-cost renewable electricity generation conditions are particularly suited for powerfuel production. Depending on the country, powerfuels could be used for the own demand first to replace fossil fuel imports or could be exported to countries which are willing to pay for the carbon-neutral nature of powerfuels.

Powerfuels will play an important role in the major industry sectors becoming carbon neutral. Powerfuels can be applied to all industry sectors as they can be tailored to have the same molecular structure as fossil fuels, allowing powerfuels to be used in existing infrastructures until more sustainable alternatives could be developed.

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The global challenge

What is need to adress climate change? Waht are existing approaches to achieve energy transition targets? How can powerfuels react on the energy... read more