Are Carbon-Based E-Fuels a Viable Path to Decarbonization? - A Critical Comparison of Global Supply and Demand

Carbon-based e-fuels, such as e-kerosene, are being discussed as a possible option for decarbonizing various end-use applications, as they could be used as drop-in fuels in existing engines and infrastructure. However, their role in decarbonization is unclear as the synthesis is energy and cost intensive and there are other competing options like direct electrification, biofuels or fossil fuels offset by negative emission technologies. Given this uncertainty, the paper analyzes different e-fuel production technologies, their current project pipelines and their estimated demand in global decarbonization scenarios. We show that the projected future use of e-fuels is mainly limited to shipping and aviation, with no role for buildings or road transport. However, even this moderate demand is only partially covered by the current project pipeline, so supply is likely to remain scarce. E-fuels should therefore be deployed only in "no-regret" applications rather than betting on their widespread adoption as a clean fuel.