Environmental implications and levelized cost analysis of E-fuel production under photovoltaic energy, direct air capture, and hydrogen

Abstract

The ecological transition in the transport sector is a major challenge to tackle environmental pollution, and European legislation will mandate zero-emission new cars from 2035. To reduce the impact of petrol and diesel vehicles, much emphasis is being placed on the potential use of synthetic fuels, including electrofuels (e-fuels). This research aims to examine a levelised cost (LCO) analysis of e-fuel production where the energy source is renewable. The energy used in the process is expected to come from a photovoltaic plant and the other steps required to produce e-fuel: direct air capture, electrolysis and Fischer-Tropsch process. The results showed that the LCOe-fuel in the baseline scenario is around 3.1 €/l, and this value is mainly influenced by the energy production component followed by the hydrogen one. Sensitivity, scenario and risk analyses are also conducted to evaluate alternative scenarios, and it emerges that in 84% of the cases, LCOe-fuel ranges between 2.8 €/l and 3.4 €/l. The findings show that the current cost is not competitive with fossil fuels, yet the development of e-fuels supports environmental protection. The concept of pragmatic sustainability, incentive policies, technology development, industrial symbiosis, economies of scale and learning economies can reduce this cost by supporting the decarbonization of the transport sector.

Keywords: Cost analysis; Environment; Hydrogen; Renewable energy; Sustainable development; e-fuel.