E-Fuel Market Size, Share & Industry Analysis, By State (Liquid and Gas), By Fuel Type (E-diesel, E-methane, E-kerosene, E-ammonia, and Others), By Application (Automotive, Aviation, Industrial, Marine, and Others), and Regional Forecast, 2024-2032

The global e-fuel market size was valued at USD 6.52 billion in 2023 and is projected to grow from USD 8.75 billion in 2024 to USD 87.92 billion by 2032, exhibiting a CAGR of 33.43% during the forecast period. North America dominated the E-fuel market with a share of 47.08% in 2023. The e-fuel market in the U.S. is projected to grow significantly, reaching an estimated value of USD 31.36 billion by 2032, driven by the integration of renewable energy sources and decarbonization goals.

E-fuel consists of hydrogen and carbon atoms similar to regular gasoline and diesel. It is a huge development as an alternative to conventional fossil fuels. Still, it is referred to as synthetic fuel produced using electricity, typically from renewable sources such as wind or solar power, to transform carbon dioxide and water into hydrocarbon fuels such as methane or synthetic gas. Synthetic fuels get their hydrogen from water and their carbon from the air through the carbon dioxide regeneration process. These fuels can be recycled in existing internal combustion engines without significant modifications and are considered a potential solution for reducing carbon emissions in the transportation sector. Production facilities, such as those in Chile, combine water and coal and reproduce the exact chemical structure of gas, diesel, or gas.

The COVID-19 pandemic has had both positive and negative effects on the development and diffusion of electronic fuel technologies. The pandemic interrupted supply chains around the world and affected the production and distribution of renewable energy sources, such as wind turbines, hydropower, and solar panels, needed to produce electrical fuels. This distribution made it difficult to expand the renewable energy infrastructure needed to produce electronic fuels. Despite the challenges, research and development of electronic fuel technology continued, and some companies and research institutes focused on optimizing the production of electronic fuel processes and increasing the efficiency of electronic fuel production.

E-Fuel Market Trends

Increasing Consumer Awareness of the Need for Sustainable Energy Alternatives Due to Concerns about Air Quality issues

As consumers become more aware of air quality and environmental issues, the need for sustainable energy alternatives such as the product is increasing. For example, in areas with high air pollution, such as urban or industrial areas, consumers may increasingly choose electric vehicles instead of traditional gasoline or diesel. This change could result in reduced emissions of dangerous pollutants such as particulate matter and nitrogen oxides, improving local air quality and public health. In addition, as concerns about climate change grow, consumers may observe these fuels as a way to reduce transportation-related greenhouse gas emissions, increasing demand for this sustainable energy option. Furthermore, customers prefer products and services with a smaller carbon footprint as they are becoming more environmentally responsible. These fuels appeal to people who care about the environment because they offer a sustainable and renewable alternative to traditional fuels.

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Electronic Fuel Market Growth Factors

Introduction Of Environmental Law Promoting The Adoption E-Fuels Leading Market Growth

Environmental laws can play an important role in promoting the adoption of the product. Governments can implement regulations that require a certain percentage of renewable fuels in the total fuel supply, creating demand for electric fuels. For example, the Renewable Fuel Standard (RFS) in the U.S. requires a certain quantity of renewable fuels, including electric fuels, to be blended into transportation fuel each year. This legislation encouraged the production and use of electronic fuels, which helped reduce greenhouse gas emissions and promote sustainability in the transportation industry. In addition, environmental legislation can establish emission standards that encourage the use of cleaner fuels, such as electronic fuel, thus encouraging market adoption.

Furthermore, for the U.S. states, the California Carbon Fuel Standard (LCFS) is a regulation. It is a program that requires fuel suppliers to decrease the carbon content of automotive fuels sold in the state. This policy encourages the adoption of alternative fuels, including electric fuels, providing credits for fuels with a lower carbon intensity. As a result, electronic fuel manufacturers are encouraged to capitalize on technologies that reduce the carbon footprint of their products and thereby promote environmental sustainability.

Growing Demand for Reducing Greenhouse Gases Intensify the Demand for the Product

Global oil demand is expected to peak this decade as energy transitions accelerate and demand for transportation fuels slows. However, according to the International Energy Agency (IEA), due to continued growth in air travel and the use of petrochemical raw materials, total oil consumption (excluding biofuels) will increase to 102 mb/d by 2030, i.e., 5 mb/d above 2022 levels. To alleviate this harmful oil demand, alternative electronic fuel is a viable option in many countries. In addition, with the growth of the transport/automotive industry, an increase in greenhouse gases is inevitable. To reduce the impact of greenhouse gases, e-fuels appear promising for the near future.

Further, according to the IEA, private cars and vans accounted for more than 25% of global oil use and 10% of global energy-related CO₂ emissions in 2022. Light vehicles need to be reduced by around 6% annually by 2030. Electric cars are a key technology for reducing carbon dioxide emissions in road transport. Sales of passenger cars are expected to increase by approximately 8 to 10% in 2024, with 18% of all new cars sold. According to the IEA, if the growth of electric cars over the past two years continues to the year 2030, the CO₂ emission of cars will decrease under the Net Zero Emission (NZE) scenario. However, electric cars are not yet a global phenomenon. Outside of China, sales in developing and emerging economies have slowly recovered due to the relatively high purchase price of electric cars and the lack of infrastructure for charging. The increase in vehicle sales is expected to lead to a rise in GHG emissions, which can be reduced by using the product.

RESTRAINING FACTORS

E-Fuel Production is Energy-Intensive and Expensive, Which May Hamper the Growth Of The Market

The production of so-called electric fuels (e-fuels) is energy-intensive. Therefore, the cost of electricity is very important for the levelized costs of fuels. It is, therefore, an attractive option to produce fuel in areas around the world where the fixed costs of renewable electricity are particularly low and high capacity utilization (CUP) is expected. Energy-dense fuels can then be transported to the energy consumption centers of the world at relatively low costs. The production of electronic fuels is still expensive as it depends on new technologies such as electrolysis, FT, DAC, and carbon capture. According to research conducted by the International Council on Clean Transportation, the production costs of e-jet fuel were estimated to be 7-10 times higher than traditional jet fuel. Thus, constant innovation is important to reduce costs.

E-Fuel Market Segmentation Analysis

By State Analysis

Extensive Use of Liquid Electronic Fuels to Propel Segment Growth

Based on state, the market is divided into liquid and gas.

The liquid segment dominates the market by holding a considerable e-fuel market share. The growth of the segment is driven by the widespread use of liquid electronic fuels, which do not require significant changes in current settings to make cars, generators, and industrial processes more efficient.

In case of gas, products derived from clean energy sources, such as renewable energy sources, are considered energy carriers such as hydrogen. Many fuels can come in form of gases, including alternatives such as e-methane or synthetic natural gas (often referred to as power-to-gas).Thus, these products can also act as energy storage solutions. However, hydrogen is sometimes considered an electronic fuel.

By Fuel Type Analysis

Growing Focus of the Automotive Sector on E-kerosene Market to Impel Segment Expansion

By fuel type, the market is divided into e-diesel, e-methane, e-kerosene, e-ammonia, and others.

The e-kerosene is the dominating segment in the market. With limited opportunities to reduce carbon dioxide emissions and the EU's goal of reducing emissions by 35% by 2050, the e-kerosene market is a particular focus in the aviation and automotive sectors. The International Energy Agency (IEA) reported that the cost of e-kerosene could compete with biomass-based Sustainable Aviation Fuel (SAF) by the end of the decade with development in electrolyzer capacity and optimization in design. It estimates that the cost of low-emission e-kerosene can be reduced by USD 50/ GJ (USD 2,150/t), which is lower than the current level of Sustainable Aviation Fuel (SAF) produced from biomass.

Furthermore, e-diesel has promising growth in the future in the automotive sector. It has a number of potential advantages, including the capability to decrease greenhouse gas emissions from the transport sector. In addition, it can be used in existing diesel vehicles and generators without major modifications, making it a promising alternative to traditional fossil fuels.

By Application Analysis

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Rapid Usage of Low-emission Fuels to Bolster the Automotive Segment Growth

Based on application, the market is segmented into automotive, marine, industrial, aviation, and others.

The automotive segment is expected to be the largest shareholder in the e-fuel market during the forecast period. Rapid deployment of low-emission fuels such as the product is considered critical to accelerating transport decarbonization. The road transport sector offers significant electrification opportunities, while the aviation and marine industries are still more dependent on fuel-based solutions for carbon removal. Fuels derived from electrolytic hydrogen or electronic fuels could be viable and will expand rapidly by 2030 based on the massive expansion of cheaper renewable electricity and falling costs of electrolyzers. Low-emission products can diversify options for reducing carbon dioxide emissions in aviation and shipping, and there is great synergistic potential with biofuel production, especially in the form of biogenic carbon dioxide use.

REGIONAL INSIGHTS

The global market has been analyzed in four key regions: North America, Europe, Asia Pacific, and the rest of the world.

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North America is the dominating region in the e fuels industry. The Infinium Company started the construction of a plant in Texas and got its first customer, Amazon. With the rise in demand by many e-commerce companies and government entities, the market in North America is poised to grow in the near future. The e-fuel market growth is due to government regulations and policy adoption in the automotive & aviation sectors.

One of the most significant legislative measures to intensify EU states’ share in the European Union's energy mix and a central part of the Fit-for-55 climate compendium is the revision of the Renewable Energy Directive (RED). Except for solar energy, along with wind and hydropower, sustainable renewable fuels such as carbon-neutral products are accelerating, phasing out fossil fuels and thus significantly reducing greenhouse gas emissions. To exploit their full potential, the revised Renewable Energy Directive must establish clear incentives to invest in their large-scale production and create a level playing field for all relevant emission reduction technologies. The European Union will require electric cars to be 100% carbon neutral if they are sold after 2035, a draft document showed, as Germany pushed for electric cars to be exempted from the phase-out of new fuels. All first-hand cars sold in the EU from 2035 must be zero-carbon, according to the main EU climate policy for cars, agreed in advance by countries in 2022.

Asia Pacific is experiencing a slow growth rate as many governments are delaying their crucial role in terms of law enforcement in environmental concerns. Singapore plans to import about 30% of its electricity from low-carbon sources by 2035, the Trade and Industry Minister said.

German Clean Tech Company INERATEC GmbH goes global by signing a Memorandum of Understanding with Japanese engineering company Chiyoda Corporation (Chiyoda) to collaborate on production of electronic fuel. Together, they want to enter the markets of Japan and the Asia Pacific region to create joint electro-fuel projects. The partners promote INERATEC's innovative Power-to-X (PtX) technology in emerging and untapped markets.

List of Key Companies in E-Fuel Market

Norsk E-Fuel is Expected to Account for a Noteworthy Market Share Owing to its Extensive Projects Working Across Europe

Norsk e-Fuel was founded in 2019 to promote the transition to renewable energy sources by producing electronic fuels, which are used in the industrial invention of sustainable fuels based on carbon dioxide and water. Aviation is one of the sectors where reducing emissions is particularly difficult, is done with great efforts by introduction of e-methanol, and it has been the fastest-growing transport sector in recent years. Together with the owners and carefully selected partners, Norsk e-Fuel plans to bring power-to-liquid production to an industrial scale.

Norwegian has entered a strategic partnership agreement with Norsk e-Fuel with the aim of securing the long-term sale of SAF and the participation of the company, in January 2024. The partnership will boost aircraft production and availability for a more sustainable aviation industry.

List of Key Companies Profiled:

• Norsk e-Fuel AS (Norway)


• Infinium (U.S.)


• Porsche AG (Germany)


• Aramco (Saudi Arabia)


• ENOWA (U.S.)


• Audi AG (Germany)


• Ineratec GmbH (Germany)


• HIF Global (U.S.)


• Repsol (Spain)


• Orsted (Denmark)


• Sunfire GmbH (Germany)


• Uniper SE (Germany)


• Liquid Wind SE (Sweden)


• Mitsubishi Heavy Industries Ltd. (Japan)


• Siemens Energy (Germany)

KEY INDUSTRY DEVELOPMENTS:

• March 2024: Argentina's Techint Engineering and Construction (Techint E&C) was selected by HIF Global to design and develop Chile's first large-scale electro-fuel plant. Primarily, the Argentinian project management and EPC firm is responsible for delivering the conceptual design and the development of Front-End Engineering Design (FEED) for the plant, announced HIF Global.


• March 2024: Infinium launched a commercial-scale green hydrogen e-fuel production facility in Corpus Christi, Texas. The site, known as Project Pathfinder, produces electronic fuels from captured carbon dioxide (CO2) and green hydrogen proprietary process that uses catalysts along with on-site electrolyzers. Infinium did not disclose the facility's electric fuel production capacity or green hydrogen and carbon dioxide input.


• November 2023: The first commercial export of green hydrogen-based electronic fuels produced by HIF Global in Chile was transported to the U.K. 24,600 liters of e-gasoline produced at the Haru Oni ​​demonstration plant left Puerto Mardones before docking in St. Antonio before going to Great Britain, where Porsche used it.


• October 2023: Energy giant Saudi Aramco partnered with ENOWA to build a synthetic electric fuel (e-fuel) demonstration plant. The electronic fuel plant will produce 35 barrels of low-carbon synthetic gasoline per day using hydrogen from renewable sources and captured carbon dioxide to validate the commercial and technical feasibility of the project. It will be housed in ENOWA's Hydrogen Innovation and Development Center (HIDC).


• December 2022: Porsche and several partners began production of a climate-neutral e-fuel that aims to replace gasoline in vehicles with traditional combustion engines. The German automaker announced that a pilot plant in Chile had begun commercial operations for the production of alternative fuels. By the middle of the decade, Porsche plans to produce millions of gallons of electronic fuel. It plans to use the fuel initially in motorsports and at its performance centers, then for other uses in the coming years. Finally, the plan is to sell the fuel for distribution to oil companies and other consumers.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects, such as prominent companies, product/service types, and leading product applications. Besides this, it offers insights into the latest market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the market's growth in recent years.

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