The Future Cost of Electricity-Based Synthetic Fuels

In the decarbonised energy system of the future, synthetic fuels from renewable electricity – also known as e-fuels – will be an important supplement to the (more energy-efficient) direct use of renewables or of electricity from renewables. Lately, there has been increased interest in scenarios that rely on the wide-scale use of synthetic fuels at greatly reduced cost. What assumptions inform these projected cost reductions? To create more transparency in future discussions, Agora Verkehrswende and Agora Energiewende commissioned Frontier Economics to analyse cost reduction paths for synthetic fuels and investigate favourable locations in Germany and abroad for generating the renewable power needed to produce them.

During the webinar we presented the main findings from the analysis (please find the link to the full study at the bottom of this page). We also drew our own conclusions in which we discussed priority fields of application of synthetic fuels (versus direct-renewable or direct-electric alternatives), necessary conditions for the projected cost reductions, as well as the need for an adequate policy framework which includes sustainability requirements for synthetic fuels.