Asia-Pacific E-Fuels Market Outlook, 2029

The Asia Pacific (APAC) e-fuel market is expanding rapidly due to rising demand for sustainable energy solutions, fuelled by environmental restrictions and a shift towards carbon-neutral initiatives. APAC countries are quickly adopting e-fuels, establishing the area as a major player in the global e-fuel business. Initially, the region's interest in renewable energy technology centred on solar, wind, and hydropower, with little emphasis on synthetic fuels. However, with the development of improved hydrogen generation technologies and growing political commitment for decarbonisation, e-fuels began to emerge as a viable alternative.

Japan, South Korea, and China became early users of hydrogen-based technologies, laying the framework for e-fuel development. These countries began to invest in infrastructure for renewable energy, hydrogen electrolysis, and carbon capture technology. On the one side, the pandemic created infrastructure project delays and supply chain disruptions, impeding the development and deployment of e-fuel technology. On the other side, the post-pandemic recovery period allowed governments to refocus their economic strategy towards sustainability. Several APAC countries launched "green recovery" policies that prioritised sustainable energy investments, such as e-fuels.

Japan's "Basic Hydrogen Strategy" seeks to promote hydrogen as a vital component of its clean energy future, including the development of e-fuels. Similarly, South Korea's "Hydrogen Economy Roadmap" focusses on developing a hydrogen-based ecosystem and encouraging developments in the synthetic fuel sector. China's 14th Five-Year Plan (2021-2025) focusses on achieving carbon neutrality by 2060, with a special emphasis on increasing renewable energy and carbon capture technology.

According to the research report "Asia Pacific E-Fuel Market Overview, 2029,", the Asia Pacific (APAC) e-fuel market is anticipated to grow at more than 26.01% CAGR from 2024 to 2029. Countries such as Japan and South Korea have pioneered advances in hydrogen generation, particularly through electrolysis, which is critical for producing the hydrogen required for e-fuel synthesis. Japan's breakthroughs in hydrogen-powered vehicles, such as the Toyota Mirai, have also helped to accelerate the development of hydrogen-based e-fuels. Toyota of Japan and Hyundai of South Korea are two of the world's premier automakers, pioneering hydrogen and synthetic fuel breakthroughs.

In the energy sector, large oil and gas firms such as China National Petroleum Corporation (CNPC) and Mitsubishi Corporation of Japan are investing extensively in hydrogen generation and carbon capture technology to assist e-fuel manufacturing. Japan's Ministry of Economy, Trade, and Industry (METI) has cooperated with large firms such as Toshiba and Panasonic to speed up hydrogen infrastructure development. Countries such as Japan and South Korea are importing modern carbon capture technologies from Europe and North America to boost their e-fuel manufacturing capacity. At the same time, these countries are exporting hydrogen manufacturing technologies and synthetic fuel advances to other APAC countries as well as global markets.

China, with its huge industrial capacity, is emerging as a significant exporter of hydrogen production equipment and carbon capture technologies. It is also presenting itself as a significant participant in the export of synthetic fuel technologies, using its Belt and Road Initiative (BRI) to form partnerships with other nations to promote the use of renewable energy alternatives. In South Korea, SK Group and Hyundai are the top suppliers of hydrogen and synthetic fuel infrastructure.

Market Drivers

Decarbonisation in Transportation and Aviation: The transportation and aviation sectors make considerable contributions to global CO2 emissions. E-fuels, which are made from renewable power, provide a realistic approach for decarbonising these businesses. In aviation, e-kerosene, a type of e-fuel, is gaining popularity as an alternative to conventional jet fuels, owing to the industry's quest for sustainable air travel. The maritime industry is also investing in e-fuels such as e-methanol and e-ammonia for cleaner shipping.

Abundant renewable energy resources: Asia-Pacific countries such as China, Australia, and India have an abundance of renewable energy resources, particularly solar and wind power, which are vital for manufacturing green hydrogen, an essential component of e-fuels. Renewable electricity at competitive pricing makes e-fuel production more feasible in this location.

Market Challenges

Limited Infrastructure: Many Asia-Pacific countries are still in the early stages of developing the infrastructure needed for e-fuel distribution and storage. Creating the requisite logistics and refuelling networks, especially for aviation and shipping, would necessitate enormous investment. Without proper infrastructure, the widespread adoption of e-fuels may be hampered.

Technological and regulatory hurdles: E-fuels are still a relatively new technology, and the sector confronts a number of technological obstacles, such as improving manufacturing efficiency and scaling them up to satisfy industrial demands. Furthermore, regulatory frameworks governing e-fuel production and consumption are not yet fully defined, causing uncertainty for enterprises wishing to engage in the field.

Market Trends

Expansion in Aviation and Shipping: Aviation and shipping are likely to be the most important sectors for e-fuels in Asia Pacific. The International Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO) have set aggressive targets for lowering emissions in their respective industries, which is increasing demand for sustainable fuels. E-kerosene and e-methanol are being developed as potential alternatives to traditional aviation and marine fuel.

Growing Focus on Green Hydrogen: Green hydrogen is an important feedstock for creating e-fuels, and its production is quickly expanding throughout the region. Countries such as Australia and Japan are emerging as pioneers in green hydrogen generation, with large-scale projects geared at meeting domestic and international demand. The increasing availability of green hydrogen is predicted to reduce the prices of e-fuel production over time, making it more competitive with traditional fuels.

The Asia-Pacific e-fuel market is led by aviation, which is driven by the pressing need to cut carbon emissions in long-distance travel.

E-fuels, such as e-kerosene, are especially important for decarbonising aviation because battery-electric solutions for long-haul flights are currently impracticable due to energy density constraints. Major airlines and governments in the region, particularly in Japan, Australia, and South Korea, are substantially investing in e-fuel technologies to achieve these objectives. Aviation's emphasis on sustainable fuel alternatives places it at the top of the e-fuel adoption curve.Leading local firms in the Asia-Pacific e-fuel market include Norsk e-Fuel, which produces e-fuels using carbon capture technology, and Mabanaft GmbH & Co. KG, which specialises in e-fuel distribution.

Furthermore, Enel Green Power is significantly involved in renewable energy initiatives related to e-fuel generation, whilst Engie and Synhelion are known for their breakthroughs in power-to-liquid processes. JERA Co., Inc. of Japan and Fortescue Future Industries (FFI) of Australia are both making substantial progress in the manufacture of green hydrogen and e-fuels, with the goal of supplying both domestic and international aviation and shipping sectors. Following aviation, the marine sector is seeing significant development in e-fuel usage, with e-methanol and e-ammonia gaining popularity as greener options to shipping. The IMO's tougher pollution controls are driving demand for cleaner fuels in the maritime industry.

In the Asia-Pacific e-fuel market, the transportation industry leads in e-fuel.

In the Asia-Pacific e-fuel market, the transportation industry leads in e-fuel adoption, particularly in aviation and shipping, which face the most regulatory and environmental challenges to reduce carbon emissions. Transportation, particularly long-haul aircraft and maritime transportation, has fewer low-carbon alternatives than other industries, such as automotive, where electric vehicles (EVs) are becoming more prevalent. E-fuels offer a viable alternative to fossil fuels by using renewable energy. Leading domestic e-fuel firms include Australia's Fortescue Future Industries (FFI), which is developing green hydrogen and e-fuel projects for aviation and shipping. Japan's JERA Co., Inc.

is also significantly involved in the production of e-fuels using renewable energy. Other major participants include Mitsubishi Power and IHI Corporation, which are investing in e-fuel technology for the transportation and industrial sectors. On the other side, the industrial and power generation sectors are seeing slower uptake of e-fuels, owing mostly to competition from other decarbonisation technologies such as hydrogen and renewable energy. In aviation, e-kerosene is a possible alternative to traditional jet fuel, and many Asia-Pacific airlines and government agencies are actively investigating e-fuels to satisfy carbon neutrality requirements. The marine sector is studying e-methanol and e-ammonia as low-emission fuels for ships, spurred by severe IMO rules.

The Asia-Pacific e-fuel market is led by e-kerosene (synthetic aviation fuel).

The Asia-Pacific e-fuel market is led by e-kerosene (synthetic aviation fuel), which is driven by the aviation sector's urgent demand for sustainable fuel alternatives to achieve rigorous decarbonisation targets. E-kerosene, produced using renewable power and carbon capture technologies, is regarded as the most viable alternative to traditional jet fuels, which account for a substantial amount of transportation emissions. Because battery-electric solutions are now impracticable for long-haul aviation, e-kerosene offers a short-term alternative for lowering emissions in this essential industry. Major airlines in Japan, South Korea, and Australia are testing e-kerosene as part of their sustainability plans. JERA Co., Inc.

and ENEOS Corporation of Japan are two of the leading local firms active in the manufacture and research of e-kerosene. These companies are heavily investing in projects that produce renewable hydrogen and synthetic fuels. In Australia, Fortescue Future Industries (FFI) is another significant participant driving efforts to increase green hydrogen production, which is required for e-kerosene manufacturing. In addition, South Korea's Korea Electric Power Corporation (KEPCO) is helping to advance e-fuel technology in the region. E-methanol, despite growing popularity, mostly serves the shipping industry. Although e-methanol is becoming a greener alternative to marine fuels in maritime transport, it is not as widely used as e-kerosene in aviation.

Hydrogen technology (Electrolysis) is the most widely adopted and developed e-fuel in Asia-Pacific.

This method eliminates carbon emissions from hydrogen used in e-fuel production, making it a preferred technology in regions like Japan, Australia, and South Korea. Governments are actively promoting hydrogen-based solutions to decarbonise multiple sectors, including transportation and industry. Countries such as Japan have led the way in hydrogen technology innovation, with companies like ENEOS Corporation and Iwatani Corporation investing extensively in hydrogen generation and electrolysis technologies. Fortescue Future Industries (FFI) of Australia is also a prominent player, leading large-scale green hydrogen projects aimed at serving domestic markets as well as exporting hydrogen for e-fuel manufacturing.

Fischer-Tropsch and Reverse-Water-Gas-Shift (RWGS) technologies are used to convert hydrogen and collected CO₂ into synthetic fuels, but are not as frequently used as electrolysis. Compared to hydrogen electrolysis, Fischer-Tropsch is less widely used due to its greater production costs and energy requirements. In the majority of regions, RWGS is still in its early stages. Several companies in Japan and South Korea are researching RWGS for its potential to reduce CO₂ emissions and create feedstocks for e-fuel manufacturing. Nonetheless, hydrogen electrolysis remains the primary technology driving the regional e-fuel market.

Japan leads the Asia-Pacific e-fuel system market, owing to its strong commitment to hydrogen technology.

Japan has taken the initiative to set ambitious climate targets, with the objective of becoming carbon neutral by 2050. The country's government has played an important role in developing regulations that encourage the use of e-fuels, particularly through the development and adoption of renewable hydrogen. This corresponds with Japan's objective to reduce dependency on fossil fuels while supporting the aviation and shipping industries. E-fuels, such as e-kerosene and e-methanol, are being integrated as sustainable alternatives. Japan's expertise in e-fuel technology is further supported by a significant investment in hydrogen infrastructure.

Major Japanese firms such as ENEOS Corporation and Iwatani Corporation are leading the way in green hydrogen production, utilising electrolysis technology to generate hydrogen for e-fuels. These companies have strong ties with international players and are active in large-scale hydrogen initiatives, both locally and globally. Japan's support for innovations such as Fischer-Tropsch and Reverse-Water-Gas-Shift (RWGS) technologies, which convert hydrogen and CO₂ into synthetic fuels, demonstrates a comprehensive approach to the e-fuel industry. The country has collaborated with worldwide firms and research organisations to develop e-fuel technology. This leadership is projected to continue as the government works to implement sustainable energy solutions across many industries.

Considered in this report

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report

• E-fuels market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By End-use

• Aviation
• Marine
• Industrial
• Railway
• Automotive
• Others

By Application

• Transportation
• Industrial
• Power Generation
• Others

By Type of E-fuel

• E-kerosene (Synthetic Aviation Fuel)
• E-diesel
• E-gasoline
• E-methanol
• Other Hydrocarbons

By Technology

• Hydrogen technology (Electrolysis)
• Fischer-Tropsch
• Reverse-Water-Gas-Shift (RWGS)

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the E-fuels industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.