Pretty much everywhere you look, there’s a focus on decarbonizing the global economy, and a lot of those discussions start with the transportation sector. It generated 27% of U.S. greenhouse gas (GHG) emissions in 2020, putting it at the top of the list, just ahead of power generation and industrial production; combined, the three sectors account for more than three-quarters of the nation’s GHG emissions. For personal transportation, most of the attention has been on electric vehicles (EVs), but since the commercial transportation sector is largely powered by diesel and jet fuel, the push for decarbonization in trucking, air travel, and shipping has largely focused on ways to produce alternative fuels that reduce GHGs. Among those are ultra-low-carbon fuels called electrofuels, also referred to as eFuels, synthetic fuels, or Power-to-Liquids (PtL). In today’s RBN blog, we explain what eFuels are and how they compare to other alternatives, how they are produced, and what opportunity there might be to make a dent in the consumption of traditional transportation fuels.
We explored many alternative fuels and the government policies that support them, such as California’s Low Carbon Fuel Standard (LCFS), in our seven-part Come Clean series. These alternatives include ethanol, a biofuel found in virtually all of the gasoline purchased in the U.S.; biodiesel, another biofuel that is produced from a variety of feedstocks, including corn oil, soybean oil, animal fats, and used cooking oil; renewable diesel (RD), a biomass-based fuel that can be used in diesel engines or as home heating oil; and sustainable aviation fuel (SAF), which is also made from renewable feedstocks and is a substitute for jet fuel.
While producing alternative fuels may help make the transportation sector greener, it’s important to remember that their production is driven by the significant financial incentives in place to produce fuels with a low carbon intensity (CI), either through California’s LCFS or the federal Clean Fuel Production Credit (CFPC) — also known as 45Z — which was created as part of the Inflation Reduction Act (IRA). There are two components to the new credit (which does not come into effect until 2025), a base credit and an emissions factor, the latter of which takes into account a fuel’s lifecycle GHG emissions rate, which is comparable to its CI score. In essence, the lower a fuel’s emissions rate, the higher the credit. As we noted in our Thunderstruck series, producers of RD and SAF stand to benefit from the IRA’s passage. The IRA also creates some complications for production processes that include captured carbon dioxide (CO2; more on that in a bit).
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