E-Fuels Market Overview, 2024-29

The worldwide e-fuel market is quickly growing as a critical component in the transition to a carbon-neutral energy system. The growing supply of green electricity from renewable sources, mainly in Europe, North America, and portions of Asia, paved the way for the e-fuel sector. In the beginning, research was primarily limited to laboratories and experimental programs, but in recent years, commercialisation efforts have increased. The expansion of the global climate movement and stronger international climate targets, such as those specified in the Paris Agreement, have fuelled interest in e-fuels.

Governments and companies around the world have recognised that conventional sectors such as aviation and shipping, which contribute considerably to global emissions, require alternative fuels to satisfy decarbonisation ambitions. The COVID-19 pandemic briefly slowed the growth of the worldwide e-fuel business because to logistical issues, supply chain interruptions, and decreased demand, particularly in aviation and shipping. However, the epidemic prompted a long-term emphasis on sustainability, with several countries incorporating green recovery plans into their economic policies. Compliance with carbon emission reduction targets, particularly in the European Union and other Paris Agreement-bound nations, has boosted demand for e-fuels.

The European Union's Fit for 55 program, which seeks to reduce net greenhouse gas emissions by at least 55% by 2030, explicitly encourages the use of e-fuels, particularly in the aviation and maritime sectors. In the United States, The Biden administration's emphasis on green energy, particularly goals for clean aviation fuel, has boosted the e-fuel business. Globally, compliance with carbon emission standards and the push for renewable energy integration are major drivers of market growth.

According to the research report "Global E-Fuel Market Market Overview, 2029,", the Global e-Fuel market was valued at more than USD 10.80 billion in 2023. Many e-fuel generation procedures rely on hydrogen electrolysis, which converts water into hydrogen and oxygen using electricity. The Global e-Fuel market is anticipated to grow at more than 25% CAGR from 2024 to 2029. The hydrogen produced can be mixed with carbon dioxide extracted from industrial operations or the atmosphere to form liquid hydrocarbons like e-diesel, e-gasoline, and e-methanol. Advances in carbon capture and storage (CCS) technologies have made it easier to integrate e-fuels into existing infrastructure.

CCS enables captured CO2 to be recycled into synthetic fuels, effectively closing the carbon loop and lowering overall emissions from fuel production and use. Porsche, Siemens Energy, and the Chilean government have formed one of the most major cooperation, with the goal of producing e-fuels on a large scale using the country's enormous renewable energy resources. In the aviation industry, British Airways and Shell have created collaborations to produce sustainable aviation fuels (SAF) based on e-fuel technologies. The worldwide e-fuel market is set to grow significantly as nations with abundant renewable energy resources, such as Chile and Australia, emerge as major exporters.

These countries may use solar and wind power to generate green hydrogen and synthetic fuels, which will be supplied to places with high demand for e-fuels, such as Europe and Asia. Europe is likely to be a significant e-fuel importer due to strict carbon reduction targets and limited local green hydrogen generation potential. The Middle East, with its abundant solar energy resources, might become a big participant in e-fuel exports, especially to Europe and Asia.

In the global e-fuel market, aviation is the most important end-use.

The aviation industry is under great pressure to decarbonise due to its considerable contribution to global CO2 emissions. Unlike other industries, aviation lacks viable alternatives such as electric or hydrogen-powered aircraft for long-haul flights, making sustainable aviation fuels (SAF) such as e-kerosene essential. E-kerosene, made from renewable electricity and carbon capture, is a near-drop-in alternative for traditional jet fuel that may be utilised in existing aircraft engines without modification. This makes e-fuels particularly appealing to airlines looking to decrease their carbon footprint and meet international carbon reduction targets such as CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation).

Siemens Energy has been actively developing technology for large-scale e-fuel production, collaborating with Porsche and Haru Oni to create e-kerosene in Chile. Meanwhile, Shell, TotalEnergies, and Neste have expanded their sustainable aviation fuel portfolios by investing in e-fuels to accommodate increased airline demand. The marine sector also plays an important role, but its use of e-fuels lags behind aviation.

Shipping companies are looking into e-methanol as a viable option for decreasing emissions in the maritime industry, but infrastructural and economic challenges remain. Aviation's dominance as an end-use segment in the worldwide e-fuel market stems mostly from the crucial need to decarbonise long-haul flights, as well as favourable legislation and investments from key players such as Siemens Energy, Porsche, and Shell.

Transportation dominates the global e-fuel business, notably in difficult-to-electrify sectors such as aircraft and shipping.

The transportation industry, particularly aviation and maritime, relies significantly on e-fuels because of their ability to replace traditional fossil fuels without requiring large adjustments to existing infrastructure and engines. As governments and industry work for decarbonisation, sectors such as aviation are constrained to use e-fuels because electric or hydrogen alternatives are impracticable for long-distance travel. This is fuelling the need for e-kerosene in aviation and e-methanol in shipping. As previously noted, aviation has the most impact in this category. With rigorous emissions laws like as CORSIA and the European Union's ReFuelEU Aviation project, airlines are increasingly turning to e-fuels to satisfy sustainability goals.

In terms of significant companies, Siemens Energy and Porsche are pioneering the manufacturing of e-fuels, particularly for aviation, through their collaboration in Chile to manufacture e-kerosene. TotalEnergies, Neste, and Shell are also major players in the e-fuel sector, with an emphasis on developing sustainable aviation and maritime fuels for the transportation industry. Although power generation is an essential industry for renewable energy solutions, it is more focused on wind, solar, and direct hydrogen applications than e-fuels. As a result, the power generation industry is not a major e-fuel consumer, with transportation dominating the worldwide e-fuel market.

Among the numerous end users of e-fuels in North America, transportation now dominates the market.

The aviation industry's pressing need for decarbonisation has made e-kerosene an important alternative to traditional jet fuels, as it provides for large carbon emissions reductions without requiring extensive changes to current infrastructure or aircraft engines. E-kerosene may be synthesised from collected CO2 and hydrogen generated by renewable power, making it a promising solution for meeting worldwide carbon-neutral targets, particularly under programs such as CORSIA and the European Union's ReFuelEU Aviation initiative. Synthetic e-kerosene is being promoted in the aviation industry due to a lack of options for decarbonising long-haul flights.

To satisfy their decarbonisation ambitions, airlines are heavily investing in sustainable aviation fuels (SAFs), such as e-kerosene. Furthermore, numerous airlines have already committed to adding more SAFs into their fuel mix, increasing demand for e-kerosene. Siemens Energy, Porsche, and Haru Oni are among the leading manufacturers and developers of e-kerosene. Their efforts, such as the one in Chile, are geared towards large-scale synthetic fuel production.

TotalEnergies, Neste, and Shell are also important players in the e-fuel market, developing sustainable aviation fuels and boosting production capacity to satisfy worldwide demand. Other e-fuels, such as e-diesel and e-methanol, are important, notably for the maritime and automotive industries, although they are not as frequently used as e-kerosene due to the immediate necessity.

In the worldwide e-fuel market, hydrogen technology (particularly electrolysis) is now the primary e-fuel production method.

Electrolysis is the process of splitting water into hydrogen and oxygen using renewable electricity, which is subsequently used to produce synthetic fuels through techniques such as the Fischer-Tropsch synthesis. This technology is especially important for creating hydrogen, which is used as a feedstock for e-fuels like e-kerosene and e-methanol, making it a critical component of the e-fuel supply chain. The increased emphasis on decarbonisation and renewable energy sources has pushed electrolysis technology to the forefront of e-fuel generation. Several countries and organisations are investing extensively in green hydrogen projects, seeing the role of hydrogen in addressing future energy demands and emissions targets.

According to a McKinsey analysis, the cost of electrolysis is likely to fall dramatically as technology advances and scales up, making hydrogen more accessible and economically viable for e-fuel production. Siemens Energy, a leading domestic hydrogen company, has been developing sophisticated electrolysis technology and is currently involved in a number of large-scale hydrogen projects across the world.

In addition, ITM Power manufactures electrolysis equipment and has participated in a number of collaborations to improve hydrogen generation capacities. Nel ASA is another major player that focusses on hydrogen solutions and is growing its electrolysis technology globally. While Fischer-Tropsch synthesis and Reverse-Water-Gas-Shift (RWGS) procedures are critical for turning hydrogen into synthetic fuels, they rely on electrolysis-produced hydrogen.

In the global e-fuel market, aviation is the most important end-use.

The aviation industry is under great pressure to decarbonise due to its considerable contribution to global CO2 emissions. Unlike other industries, aviation lacks viable alternatives such as electric or hydrogen-powered aircraft for long-haul flights, making sustainable aviation fuels (SAF) such as e-kerosene essential. E-kerosene, made from renewable electricity and carbon capture, is a near-drop-in alternative for traditional jet fuel that may be utilised in existing aircraft engines without modification. This makes e-fuels particularly appealing to airlines looking to decrease their carbon footprint and meet international carbon reduction targets such as CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation).

Siemens Energy has been actively developing technology for large-scale e-fuel production, collaborating with Porsche and Haru Oni to create e-kerosene in Chile. Meanwhile, Shell, TotalEnergies, and Neste have expanded their sustainable aviation fuel portfolios by investing in e-fuels to accommodate increased airline demand. The marine sector also plays an important role, but its use of e-fuels lags behind aviation.

Shipping companies are looking into e-methanol as a viable option for decreasing emissions in the maritime industry, but infrastructural and economic challenges remain. Aviation's dominance as an end-use segment in the worldwide e-fuel market stems mostly from the crucial need to decarbonise long-haul flights, as well as favourable legislation and investments from key players such as Siemens Energy, Porsche, and Shell.

Transportation dominates the global e-fuel business, notably in difficult-to-electrify sectors such as aircraft and shipping.

The transportation industry, particularly aviation and maritime, relies significantly on e-fuels because of their ability to replace traditional fossil fuels without requiring large adjustments to existing infrastructure and engines. As governments and industry work for decarbonisation, sectors such as aviation are constrained to use e-fuels because electric or hydrogen alternatives are impracticable for long-distance travel. This is fuelling the need for e-kerosene in aviation and e-methanol in shipping. As previously noted, aviation has the most impact in this category. With rigorous emissions laws like as CORSIA and the European Union's ReFuelEU Aviation project, airlines are increasingly turning to e-fuels to satisfy sustainability goals.

In terms of significant companies, Siemens Energy and Porsche are pioneering the manufacturing of e-fuels, particularly for aviation, through their collaboration in Chile to manufacture e-kerosene. TotalEnergies, Neste, and Shell are also major players in the e-fuel sector, with an emphasis on developing sustainable aviation and maritime fuels for the transportation industry. Although power generation is an essential industry for renewable energy solutions, it is more focused on wind, solar, and direct hydrogen applications than e-fuels. As a result, the power generation industry is not a major e-fuel consumer, with transportation dominating the worldwide e-fuel market.

Among the numerous end users of e-fuels in North America, transportation now dominates the market.

The aviation industry's pressing need for decarbonisation has made e-kerosene an important alternative to traditional jet fuels, as it provides for large carbon emissions reductions without requiring extensive changes to current infrastructure or aircraft engines. E-kerosene may be synthesised from collected CO2 and hydrogen generated by renewable power, making it a promising solution for meeting worldwide carbon-neutral targets, particularly under programs such as CORSIA and the European Union's ReFuelEU Aviation initiative. Synthetic e-kerosene is being promoted in the aviation industry due to a lack of options for decarbonising long-haul flights.

To satisfy their decarbonisation ambitions, airlines are heavily investing in sustainable aviation fuels (SAFs), such as e-kerosene. Furthermore, numerous airlines have already committed to adding more SAFs into their fuel mix, increasing demand for e-kerosene. Siemens Energy, Porsche, and Haru Oni are among the leading manufacturers and developers of e-kerosene. Their efforts, such as the one in Chile, are geared towards large-scale synthetic fuel production.

TotalEnergies, Neste, and Shell are also important players in the e-fuel market, developing sustainable aviation fuels and boosting production capacity to satisfy worldwide demand. Other e-fuels, such as e-diesel and e-methanol, are important, notably for the maritime and automotive industries, although they are not as frequently used as e-kerosene due to the immediate necessity.

In the worldwide e-fuel market, hydrogen technology (particularly electrolysis) is now the primary e-fuel production method.

Electrolysis is the process of splitting water into hydrogen and oxygen using renewable electricity, which is subsequently used to produce synthetic fuels through techniques such as the Fischer-Tropsch synthesis. This technology is especially important for creating hydrogen, which is used as a feedstock for e-fuels like e-kerosene and e-methanol, making it a critical component of the e-fuel supply chain. The increased emphasis on decarbonisation and renewable energy sources has pushed electrolysis technology to the forefront of e-fuel generation. Several countries and organisations are investing extensively in green hydrogen projects, seeing the role of hydrogen in addressing future energy demands and emissions targets.

According to a McKinsey analysis, the cost of electrolysis is likely to fall dramatically as technology advances and scales up, making hydrogen more accessible and economically viable for e-fuel production. Siemens Energy, a leading domestic hydrogen company, has been developing sophisticated electrolysis technology and is currently involved in a number of large-scale hydrogen projects across the world. In addition, ITM Power manufactures electrolysis equipment and has participated in a number of collaborations to improve hydrogen generation capacities. Nel ASA is another major player that focusses on hydrogen solutions and is growing its electrolysis technology globally. While Fischer-Tropsch synthesis and Reverse-Water-Gas-Shift (RWGS) procedures are critical for turning hydrogen into synthetic fuels, they rely on electrolysis-produced hydrogen

Europe presently dominates the global e-fuel system industry, owing to its strong commitment to renewable energy and climate goals.

The region has set lofty goals to reach carbon neutrality by 2045, with a strong emphasis on finding sustainable fuel alternatives. Europe's strategic initiatives, such as the National Hydrogen Strategy, highlight the significance of hydrogen and e-fuels in the transition to a low-carbon economy. Several significant reasons contribute to Germany's dominance in the e-fuel sector. The country has a strong industrial base, with big car manufacturers like Volkswagen, BMW, and Daimler investing extensively in e-fuels and hydrogen technology to meet strict emissions requirements. Furthermore, Germany's enormous R&D ecosystem, sponsored by institutions such as the German Aerospace Centre (DLR).

Furthermore, collaborations with international partners strengthen Germany's skills in e-fuel manufacturing. Collaboration with countries like Norway on hydrogen generation and infrastructure development is crucial for scaling up e-fuel technology. This combination of government assistance, industrial collaboration, and research activities positions Germany as a global e-fuel market leader, playing an important role in the transition to sustainable energy alternatives.

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.