Selective use of synthetic fuels essential to help decarbonise German transport, industry and heating – think tanks

Germany will need the well-directed use of power-based synthetic fuels in connection with a phase-out of oil and natural gas to reach its long-term climate targets, the think tanks Agora Energiewende and Agora Verkehrswende* write in a joint analysis. Synthetic fuels will play an important role in decarbonising the chemical and other industries, as well as part of the transport sector. But they should be used very selectively, says Patrick Graichen, head of Agora Energiewende. “Wherever we can use power directly, like in the building sector, we should do this. It will always be cheaper and more efficient than the use of synthetic fuels.” Synthetic methane and oil would initially cost 20-30 cents per kilowatt hour in Europe, which could drop to 10 cents by 2050. But this could happen only if global installed power-to-gas and power-to-liquid capacities increased to 100 gigawatt, with the help of “significant early and continued investment in electrolysers and CO₂ absorbers”. This cannot be expected without political intervention or a high price on CO₂, write the think tanks. Synthetic fuels are not an alternative to fossil oil and gas, but rather complement other direct renewable energy and electricity use, such as e-cars and heat pumps. A combustion-engine vehicle running on synthetic fuels needed about five times the amount of electricity as a battery-powered car, says Agora Verkehrswende director Christian Hochfeld. “Synthetic fuels are everything but a ‘miracle diesel’.” Power-to-x facilities require inexpensive renewable electricity and need to run at high performance for most of the time to be profitable, so new renewables capacity must be built in Germany or other regions, such as North Africa or the Middle East, giving oil and gas export countries a post-fossil business model, say the researchers.

Find the study in German here.

*Like the Clean Energy Wire, Agora Verkehrswende and Agora Energiewende are projects funded by the Mercator Foundation and the European Climate Foundation.