Global E-Fuels Market Research Report, 2024-29

Market Dynamic

In the global e-fuel market, aviation is the most important end-use. The aviation industry is under great pressure to decarbonise due to its considerable contribution to global CO2 emissions. Unlike other industries, aviation lacks viable alternatives such as electric or hydrogen-powered aircraft for long-haul flights, making sustainable aviation fuels (SAF) such as e-kerosene essential. E-kerosene, made from renewable electricity and carbon capture, is a near-drop-in alternative for traditional jet fuel that may be utilised in existing aircraft engines without modification. This makes e-fuels particularly appealing to airlines looking to decrease their carbon footprint and meet international carbon reduction targets such as CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation). Siemens Energy has been actively developing technology for large-scale e-fuel production, collaborating with Porsche and Haru Oni to create e-kerosene in Chile. Meanwhile, Shell, TotalEnergies, and Neste have expanded their sustainable aviation fuel portfolios by investing in e-fuels to accommodate increased airline demand. The marine sector also plays an important role, but its use of e-fuels lags behind aviation. Shipping companies are looking into e-methanol as a viable option for decreasing emissions in the maritime industry, but infrastructural and economic challenges remain. Aviation's dominance as an end-use segment in the worldwide e-fuel market stems mostly from the crucial need to decarbonise long-haul flights, as well as favourable legislation and investments from key players such as Siemens Energy, Porsche, and Shell. Transportation dominates the global e-fuel business, notably in difficult-to-electrify sectors such as aircraft and shipping. The transportation industry, particularly aviation and maritime, relies significantly on e-fuels because of their ability to replace traditional fossil fuels without requiring large adjustments to existing infrastructure and engines. As governments and industry work for decarbonisation, sectors such as aviation are constrained to use e-fuels because electric or hydrogen alternatives are impracticable for long-distance travel. This is fuelling the need for e-kerosene in aviation and e-methanol in shipping. As previously noted, aviation has the most impact in this category. With rigorous emissions laws like as CORSIA and the European Union's ReFuelEU Aviation project, airlines are increasingly turning to e-fuels to satisfy sustainability goals. In terms of significant companies, Siemens Energy and Porsche are pioneering the manufacturing of e-fuels, particularly for aviation, through their collaboration in Chile to manufacture e-kerosene. TotalEnergies, Neste, and Shell are also major players in the e-fuel sector, with an emphasis on developing sustainable aviation and maritime fuels for the transportation industry. Although power generation is an essential industry for renewable energy solutions, it is more focused on wind, solar, and direct hydrogen applications than e-fuels. As a result, the power generation industry is not a major e-fuel consumer, with transportation dominating the worldwide e-fuel market. Among the numerous end users of e-fuels in North America, transportation now dominates the market. The aviation industry's pressing need for decarbonisation has made e-kerosene an important alternative to traditional jet fuels, as it provides for large carbon emissions reductions without requiring extensive changes to current infrastructure or aircraft engines. E-kerosene may be synthesised from collected CO2 and hydrogen generated by renewable power, making it a promising solution for meeting worldwide carbon-neutral targets, particularly under programs such as CORSIA and the European Union's ReFuelEU Aviation initiative. Synthetic e-kerosene is being promoted in the aviation industry due to a lack of options for decarbonising long-haul flights. To satisfy their decarbonisation ambitions, airlines are heavily investing in sustainable aviation fuels (SAFs), such as e-kerosene. Furthermore, numerous airlines have already committed to adding more SAFs into their fuel mix, increasing demand for e-kerosene. Siemens Energy, Porsche, and Haru Oni are among the leading manufacturers and developers of e-kerosene. Their efforts, such as the one in Chile, are geared towards large-scale synthetic fuel production. TotalEnergies, Neste, and Shell are also important players in the e-fuel market, developing sustainable aviation fuels and boosting production capacity to satisfy worldwide demand. Other e-fuels, such as e-diesel and e-methanol, are important, notably for the maritime and automotive industries, although they are not as frequently used as e-kerosene due to the immediate necessity. In the worldwide e-fuel market, hydrogen technology (particularly electrolysis) is now the primary e-fuel production method. Electrolysis is the process of splitting water into hydrogen and oxygen using renewable electricity, which is subsequently used to produce synthetic fuels through techniques such as the Fischer-Tropsch synthesis. This technology is especially important for creating hydrogen, which is used as a feedstock for e-fuels like e-kerosene and e-methanol, making it a critical component of the e-fuel supply chain. The increased emphasis on decarbonisation and renewable energy sources has pushed electrolysis technology to the forefront of e-fuel generation. Several countries and organisations are investing extensively in green hydrogen projects, seeing the role of hydrogen in addressing future energy demands and emissions targets. According to a McKinsey analysis, the cost of electrolysis is likely to fall dramatically as technology advances and scales up, making hydrogen more accessible and economically viable for e-fuel production. Siemens Energy, a leading domestic hydrogen company, has been developing sophisticated electrolysis technology and is currently involved in a number of large-scale hydrogen projects across the world. In addition, ITM Power manufactures electrolysis equipment and has participated in a number of collaborations to improve hydrogen generation capacities. Nel ASA is another major player that focusses on hydrogen solutions and is growing its electrolysis technology globally. While Fischer-Tropsch synthesis and Reverse-Water-Gas-Shift (RWGS) procedures are critical for turning hydrogen into synthetic fuels, they rely on electrolysis-produced hydrogen.