Porsche Begins Production Of E-Fuels In Chile

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Porsche proudly announced this week that it has begun producing synthetic e-fuels in cooperation with Chile’s Highly Innovative Fuels at a facility near Punta Arenas in the south of Chile near the Strait of Magellan. From the port of Cabo Negro, the synthetic e-fuel can be transported just like traditional fuels all over the world and be distributed using the existing infrastructure.

In a press release, Porsche said it is working towards a carbon neutral balance sheet across its entire value chain by 2030, including its future all electric models. Synthetic fuels supplement electromobility, the company says, and are part of Porsche’s sustainability strategy. To date, it has invested over $100 million in the development and production of e-fuels, including $75 million in HIF Global LLC in April 2022. HIF plans, builds, and operates e-fuel facilities in Chile, the US, and Australia.

“Porsche is committed to a double-e path: e-mobility and e-fuels as a complementary technology. Using e-fuels reduces CO2 emissions. Looking at the entire traffic sector, the industrial production of synthetic fuels should keep being pushed forward worldwide. With this e-fuels pilot plant, Porsche is playing a leading role in this development,” said Barbara Frenkel, who is in charge of procurement at Porsche.

“The potential of e-fuels is huge. There are currently more than 1.3 billion vehicles with combustion engines worldwide. Many of these will be on the roads for decades to come, and e-fuels offer the owners of existing cars a nearly carbon neutral alternative. As the manufacturer of high performance, efficient engines, Porsche has a wide range of know how in the field of fuels,” added Michael Steiner, head of research and development at Porsche. According to CNBC, Steiner and others reiterated that the development of e-fuels does not change the company’s plans to have 80% of its lineup consist of EVs by 2030.

In the pilot phase, e-fuel production of around 130,000 liters (34,342 gallons) per year is planned. Initially the fuel is to be used in lighthouse projects such as the Porsche Mobil 1 Supercup and at Porsche Experience Centers. After the pilot phase, the first scaling will take the project in Chile up to a projected 55 million liters (14.53 million gallons) per year by the middle of the decade. Around two years later the capacity is expected to be 550 million liters (145.3 million gallons).

Image courtesy of Porsche

What Are E-Fuels?

Bosch, one of the largest suppliers to the automotive industry worldwide, is a strong proponent of e-fuels. In a blog post, it says, “Synthetic, or carbon-neutral, fuels capture CO₂ in the manufacturing process. In this way, this greenhouse gas becomes a raw material, from which gasoline, diesel, and substitute natural gas can be produced with the help of electricity from renewable sources. One further crucial advantage of the combustion engine using synthetic fuels is that the existing filling-station network can continue to be used.

“The same applies to the existing combustion-engine expertise. Moreover, even though electric cars will become significantly less expensive in the years ahead, the development of these fuels may be worthwhile. Bosch has calculated that, up to a lifetime mileage of 160,000 kilometers, the total cost of ownership of a hybrid running on synthetic fuel could be less than that of a long-range electric car, depending on the type of renewable energy used.”

Well, maybe. In May of 2021, Transport and Environment published a study of e-fuels that was anything but complimentary. “Of all the technologies to decarbonize cars — sustainable batteries, green hydrogen, and renewable e-fuels — electrifying cars directly using batteries is by far the most efficient zero emissions pathway. Driving a car on e-fuels produced from renewable electricity would require close to five times more energy (emphasis added) than when driving a battery electric vehicle. Additional analysis in this paper now shows how both on cost and life cycle emissions, BEVs strongly outperform e-fuel powered petrol cars.

“T&E’s Total Cost of Ownership analysis shows that the very high costs of operating a conventional vehicle running on e-fuels would place a cost burden on the average European driver. For both new and second hand cars in 2030, the TCO premium for running a car on e-petrol compared to a BEV is €10,000, or 43% more expensive for an average driver. Critically, the TCO of running an existing petrol car on e-fuels would still be 10% higher than buying a new battery electric car, making e-fuels an unaffordable and unsuitable option for the existing fleet.”

In October, T&E published another report saying there would only be enough e-fuels available by 2035 to operate 2% of the existing fleet of combustion engine vehicles.

Free Electricity & Carbon Capture

Hydrogen, carbon, and oxygen can be combined to make hundreds of millions of compounds like synthetic gasoline, asphalt, plastic bags, or non-stick coatings for fry pans. A talented chemist can figure out new and interesting ways to combine them in order to create new products. In fact, at the Silverstone Formula One race this year, Sebastian Vettel drove his 1992 Williams FW14B around the track using an e-fuel that had been engineered to precisely mimic the gasoline that car used 40 years ago.

To make an e-fuel, the first step is to split water unto its component atoms — hydrogen and oxygen. Alert readers will recall that there are all sorts of schemes afoot in the world to make green hydrogen and all of them rely on the premise that there will soon be so much renewable energy available that the excess could be used to power electrolyzers to split water molecules apart.

In fact, Porsche says the south of Chile offers ideal conditions for the production of e-fuels because the wind blows 270 days a year, which enables wind turbines to operate at full capacity. While that may be true, Chile also has a significant number of communities, especially for Indigenous people, that could benefit from low cost renewable energy as much or more than Porsche owners.

The other negative in this scenario is the blithe assumption that carbon capture will work and be economically feasible. The fossil fuel industry is desperate for this gambit to succeed. That way they can continue making their climate-destroying products and leave it to someone else to clean up their mess.

The Takeaway

We’re happy that Porsche is backing e-fuels. We really are. But its achievement is probably not the breakthrough for the environment they make it out to be. It’s more likely a device to allow the company to keep selling internal combustion engines — something it is very, very good at — a little while longer. Don’t expect these carbon neutral fuels to be available at your local Gas ‘N’ Go anytime soon.


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