Home Synthetic Fuels – Can This Be the Magic Bullet Environmentalists Wanted?

Electric vehicles are off to a strong start when getting renewable energy out on the road.

Still, not everyone is sold yet, and electric cars face a contender in “Synthetic fuel.” Many automakers, such as BMW and Porsche, have invested a lot of money in exploring synthetic fuels because the existing gasoline cars can be made carbon-neutral with synthetic fuels.

Everyone might wonder, “Isn’t burning stuff bad for the environment?” Well, not entirely. Fossil fuels take sequestered carbon from the environment (hydrocarbons via crude oil), burn it, and release that carbon dioxide into the atmosphere, ultimately increasing the amount of carbon dioxide in the environment.

On the other hand, synthetic fuels take a different approach. Synthetic fuels, called synfuel or “e-fuels,” are carbon-neutral fuel alternatives engineered for the current ICEs (internal combustion engines). Synthetic fuels take the carbon dioxide already in the atmosphere and combine it with hydrogen to make it a suitable fuel. The combustion of this fuel is like fossil fuels. However, unlike fossil fuels, synthetic fuels return CO2 into the atmosphere, allowing it a net-zero carbon footprint.

An essential thing to understand is Synthetic Fuels (E-fuels) are very different from Biofuels. Biofuels are produced from crops like sugar cane, corn, algae, soybeans, and even some forms of grass. This “natural” fuel is already partially utilized, and you can find diesel blends already in circulation. Coming back to synthetic fuels, they bypass photosynthesis altogether. Instead, these are “lab-made” fuels made via electrolysis, methanol, or even the excretions of certain microorganisms. However, the fundamentals stay the same: take carbon dioxide from the atmosphere and combine it with hydrogen.

The carbon and hydrogen turn to synthetic ethanol and water (synthetic diesel). Both synthetic fuels and biofuels offer the same result: an energy source that is carbon-neutral and doesn’t result in the same industry/ecosystem overhaul that electric vehicles require. An exhibit shown below presents the overall mechanism for synthetic fuel production.


If synthetic fuels are so great and allow existing vehicle users to maintain the status quo without resulting in harmful emissions, why haven’t synthetic fuels taken over yet? To answer this question, we must look at how EVs and synthetic fuels stack up in the real world. Therefore, it will be essential to compare these two technologies on the following parameters: efficiency, costs, infrastructure, and environmental impact.

Battery-electric vehicles (BEVs) comparison with synthetic fuels vehicles

All renewable energy sources have a few limitations, for example, the impact of seasonal changes. Synthetic fuels, too, have some limitations that we will discuss briefly in this section. However, the most critical challenge with synthetic fuels is their efficiency.

When it comes to alternate energy sources, three things that are the most critical are –

  • Energy density
  • Energy transfer
  • Energy efficiency (i.e., how much initial energy remains from the source to the endpoint)

In principle, we’re looking at three questions concerning using synthetic fuel or EVs –

  • How much energy can we store in our passenger cars (to avoid unnecessary halts to refuel or recharge)?
  • How many steps are involved in transitioning energy from the engine to the vehicle’s wheels?
  • How much of that energy is lost when it gets to the wheels? In alternate words, how much energy is lost during the conversion process?

The exhibit below compares synthetic fuels with battery-electric vehicles regarding the overall TCO and the lifecycle of CO2 emissions.


Comparison of Efficiency, Cost, Infrastructure, and Environmental Impact / Emissions

Comparison on Efficiency

Concerning energy density, synthetic fuels have shown some excellent potential. Biodiesel and ethanol average 26-38 MJ/kg on biofuel. This isn’t too far off from the current fossil fuels that stand at 44-55 MJ/kg. Electrofuels, too, hold their own at around 32MJ. On the other hand, lithium-ion batteries fall a little short in this area at about 2.5 MJ.

On the other hand, synthetic fuel is suitable for energy storage. Synthetic fuels are a good match in large vehicles such as planes and shipping freighters, where energy must be stored in a relatively condensed space. Moreover, the maritime industry has been keen on synthetic fuels as companies like Maersk incorporate methanol-fuelled vessels in their fleet.

We eventually want energy to get out of storage and into action. Unfortunately, this is where synthetic fuels fall behind. Battery-powered electric vehicles have an advantage regarding energy transfer since the energy process is more straightforward.

The electric vehicle’s energy transfer process has three critical steps. First, energy is generated at the source, transmitted to the battery, and later to the motor. On the other hand, synthetic fuels have a few more processing steps along the way. That energy must undergo electrolysis and carbon capture, go through the power-to-lipid process, and then navigate from the fuel tank to the engine.

Transferring energy takes more steps in the case of synthetic fuels. Unfortunately, the efficiency drops with each step. Biofuel has a problem with energy efficiency. Over 7,000 kCal of biomass is required to produce one liter of ethanol. However, the end product contains only 5,130 kCal. Moreover, the process itself is energy-negative. On the contrary, battery-powered electric vehicles boast an energy efficiency rate of around 69%, implying that 69% of the energy survives from storage to wheels.

Comparison of the cost

One of the biggest hurdles regarding synthetic fuels is the cost. Unfortunately, oil prices can be a little unstable, as we have seen lately. So when oil prices drop, they bring the profit margins of biofuels down. Combined with the rising cost of corn, we are looking at a measly $1 profit per ton produced.

The government heavily subsidizes the corn and soybean industries. Some critics also look at the ethanol-based fuel industry as a way to generate employment that otherwise may not be possible around electric vehicles.

Synthetic fuels, too, face similar challenges. Finding a manufacturer who can produce large quantities to make a difference in the market is challenging. Moreover, synthetic fuels cost $94 to $232 per ton of CO2. Regarding upfront costs, starting an artificial fuel plant can take millions of dollars, and production offers razor-thin profit margins.

With the high upfront costs and low profit, synthetic fuel manufacturers can find it hard to attract private investors, which makes it hard to raise the capital required in the future. Hence, synthetic fuels are an economical option in areas with tighter emission policies and subsidies from the government.

So far, we’ve discussed the production costs. But what about the actual cost to the consumer? Unfortunately, synthetic fuels don’t put up a great picture. In comparison, synthetic fuels can cost a consumer anywhere from $10 to $38/gallon! (That’s $2.64 to $10.04 per L!).

Performance and premium car manufacturers like BMW, Porsche, and Formula 1 are at the forefront, incorporating carbon-neutral sources like synthetic fuels. For these carmakers, the price tag of synthetic fuel may not be a dealbreaker. However, for the everyday driver, that’s quite the sting in the wallet.

Comparison of the Infrastructure

Transitioning away from fossil fuels will indeed require a change in our infrastructure. So how will things look different in a world based on electric vehicles versus a world running on synthetic fuels?

To everyone’s surprise, a world running on synthetic fuels may not look that different from our current one. This is because synthetic fuels can be distributed with our existing infrastructure, like the 115,000 gas stations used today in the United States. On the other hand, vehicle owners can use their old cars and will not need to buy new electric vehicles. It can be a massive advantage for those looking to drive the current vehicle or a classic and vintage collection of cars. All this can make switching to synthetic fuels relatively easy, logistically and culturally.

Even climate change naysayers may be less resistant to switching to synthetic fuels if they can find a way to keep their old cars. Unlike electric vehicles, vehicles that run on synthetic fuel can still be noisy, which could be a plus, depending on who you are. Some performance car makers, such as Porsche, have already adopted synthetic fuel models to highlight the tech.

But nostalgia doesn’t compensate for some of the synthetic fuel’s blatant downsides. Synthetic fuels are still inefficient, expensive, and just a last-gasp effort for oil companies to stay in business. On the other hand, electric vehicles and their charging stations are already getting integrated into our infrastructure and show no signs of stopping. On the contrary, just the opposite, it’s accelerating.

Comparison of Environmental Impact / Emissions

In theory, electric vehicles and synthetic fuels have zero lifetime CO2 emissions, or at least near zero. However, in the real world, this depends entirely on the manufacturers. For example, right now, electric vehicles require those pesky lithium-ion batteries, which require the painstaking excavation of precious minerals AND a lot of electricity, neither of which are always obtained from clean sources. As a result, lithium batteries can contribute around 25% of the electric car’s lifetime CO2 emissions.

It would also be essential to consider where the electricity comes from in terms of the source. Electricity produced from coal still results in emissions, even if we say the electric vehicle itself is emission-free. But, of course, it is safe to say that it is still cleaner than running a car on gasoline. The source of that electricity ultimately matters is whether the production is green, which is why an electric vehicle can produce around 20 tons of CO2 before it’s driven off the lot. However, this situation is slowly improving for electric vehicles as our electricity production gets cleaner in the future.

Synthetic fuel production runs into similar predicaments. For instance, Porsche’s new synthetic fuel plant still requires concrete, one of construction’s most significant sources of CO2 emissions. That’s not even considering the emissions from fuel shipping in tankers or the refineries needed to make the fuel usable.

Biofuels have their environmental impacts to consider. For example, over 90 million acres of farmland in the US are used for producing corn, and about 40% of that is used for producing ethanol, which supplements about 10% of the gas used by US consumers today.

Using biomass for fuel comes with other environmental hazards, including biodiversity loss, insecticides, excessive water usage, and potential food insecurity. So put, producing one gallon of ethanol from corn grain can take about 2-9 gallons of water, depending on the method used to convert the grain. Biofuels are ultimately a zero-sum game wherein the crops, water, and land used for biofuels can’t be used for food production.

Some producers have tried to mitigate this problem by switching the biomass source. For example, sugarcane biofuel is an energy-positive process. However, it can also lead to deforestation in the Amazon since importing it from the forests is still cheaper than growing it domestically on croplands. Other sources, such as algae, offer promising results but are still energy-intensive and expensive, negating their current environmental benefits.

Can synthetic fuels be produced in an environmentally-safe way? Yes, it can be. But will it be the cheapest option? At this time, it is certainly not.

Future impact of synthetic fuel vehicles

With the scale of investments in electric vehicles compared to the assets put into synthetic fuel, it would be brave to say that synthetic fuels are anything other than a sideshow when powering billions of passenger vehicles.

It is not just passenger vehicles that run on fossil fuels. If the aim is to decarbonize transportation, aviation, and shipping, which rely almost entirely on oil-derived products, it will surely fall under greater scrutiny. These industries are not well-suited to electrification, and synthetic fuels could soon be used for jet and maritime industries.

It is also possible that once passenger vehicles with ICE disappear almost entirely from our roads, synthetic fuels could be used in future classic passenger vehicles or used in motorsport. As one example, Formula 1 has begun a synthetic fuel program and intends F1 cars to be powered by the stuff in 2026 as part of its carbon-neutrality drive.

In many ways, synthetic fuels are a promising future alternative. However, they won’t dethrone EVs anytime soon if it will do so in the future. Moreover, synthetic fuels will surely not be the magic bullet some environmentalists want. Nevertheless, synthetic fuels can be helpful to transition any naysayers who are still attached to the combustion engines, including the oil companies. In addition, they may ease the shift away from fossil fuels for large forms of transportation, such as planes and ships, where batteries aren’t an option yet.

EVs remain the strongest contender for everyday passenger vehicles for the foreseeable future. First, however, we must be aware of EV technologies’ “behind-the-scenes” emissions and environmental impact.


Can Synthetic fuels be the holy grail in decarbonizing the energy-intensive sectors? Can it provide corporate decision-makers with a tool to go beyond carbon offsetting? Speak to our experts today




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