Here’s How Porsche’s Synthetic Fuel Could Be A Gamechanger In The Auto Industry

In 2022, Porsche announced it was investing $75 million in a Chilean eFuel company. Efuels, or fuels made from renewable resources, come in a few different forms and vary from e-kerosene to e-methanol. The latter is already playing a key part in reducing carbon emissions in the shipping container industry. In 2021, Yale Climate Connections reported that the shipping industry accounted for roughly three percent of the world’s carbon emissions — surpassing the major emissions culprit: airline travel. But, what Porsche aims to pull off is replacing gasoline with eFuels to help decarbonize the auto industry.

The German manufacturer’s investment will help the company achieve its 2030 sustainability strategy and could safeguard Porsche’s motorsports interests in anticipation of future strict fuel regulations. While the exploration into synthetic fuels benefits the company specifically, it also has the potential to shake up the entire auto industry without threatening electric vehicle growth.

In order to give you the most up-to-date and accurate information possible, the data used to compile this article was sourced from various manufacturer websites and other authoritative sources, including Porsche, Car and Driver, and Car Magazine.

Porsche Is Leading The Auto Industry In Developing Synthetic Fuels

Although Porsche aims for over 80 percent of its new vehicle fleet to be categorized as electric vehicles by the end of the decade, Porsche realizes the majority of the company’s cars on the road currently are gas-powered. The automaker plans to begin with a focus on its most iconic car, the Porsche 911, according to Car and Driver, and put eFuel on the market for sale by 2030, a Porsche representative told Car Magazine.

Porsche Is Committed

Porsche may not seem like the obvious choice. Why not a start-up? However, according to Tatler, sustainability “isn’t just a destination for Porsche, it’s a holistic commitment.” So, focusing on a future fleet of all-electric vehicles like the majority of the auto industry doesn’t seem to cut it for Porsche. Rather, the company hopes to create a clean energy solution for its vehicles still on the road today — over 700,000 of those cars being 911s, according to Road and Track.

Along with road cars, Porsche is monitoring the opportunities for sustainable fuels on track as well. The manufacturer’s investment could mean big things for its racing teams. Although the company is already involved in electric motorsports series, including Formula E, it aims to look into alternative fuel options for gas-powered and hybrid sports cars as well.

Porsche isn’t the only one looking at eFuels. The president of IMSA told The Detroit News in October that “the next step in fuel. Our fuel partner, VP, is currently providing us with 80 percent renewable fuel made from plant waste. But in the future, 100 percent renewable fuel could be in our playbook.” Additionally, Shell tested 100 percent renewable fuel in the NTT IndyCar Series last February and will fuel the series’ cars in the future.

“With the debut of the new fuel developed by Shell, the NTT IndyCar Series becomes the first United States-based motorsports series to power racing with 100 percent renewable race fuel that enables at least 60 percent of greenhouse gas emissions reduction compared to fossil-based gasoline,” the series announced.

What Porsche Has Done So Far

Porsche said that the eFuels program will first focus on petrol engines by creating methanol via splitting a hydrogen cell and capturing carbon dioxide in the air. The two react and are then turned into a petrol substance. While testing has only just begun, Porsche aims to inject eFuels into its current gas-powered vehicles in the coming years.

The project is the first of its kind in scale and scope, along with being the “world’s first integrated, large-scale commercial plant to manufacture synthetic, carbon-neutral fuels.” The energy plant will use Chile’s wind and solar power to fuel the creation of eFuels.

eFuels Offer Energy Companies An Entry Into The Climate Conversation

Several Big Oil and energy giant executives attended the United Nations’ COP28 annual climate summit at the beginning of December in Dubai. One of the many company leaders in attendance was Darren Woods, the CEO of ExxonMobil, who sat in on the conference for the first time, according to Bloomberg. While Woods faced backlash after advocating for a “reduction” terminology in the climate conversation rather than entirely phasing out non-renewable energy sources, the company is investing in alternative fuel sources.

The Companies Behind Porsche’s eFuels Project Include Big Energy Giants

ExxonMobil is one of seven companies included in Porsche’s Haru Oni project to research and test sustainable fuels in Chile. The other companies include Enel, Siemens Energy, and energy providers local to Chile including Gasco, ENAP, and AME, according to Porsche.

The decision to invest in Chile was heavily influenced by low energy costs and taxes, along with a greater amount of wind turbine power. Chile also aims to be the top producer of the cheapest green hydrogen.

Porsche Leans On The Cost Argument

The decision to invest in Chile was heavily influenced by low energy costs and taxes, along with a greater amount of wind turbine power. As Porsche said in a press release, “The low cost of energy for manufacturing eFuels in Chile is not the only important factor: taxes and charges will also have an impact on the price, and therefore the financial success, of the product.”

The company went on to say “eFuels will become competitive faster as fossil fuels become more expensive in the years ahead due to regulatory measures such as energy taxes and carbon pricing, as well as measures that make eFuels exempt from such charges.”

Fossil fuels are not just set to become expensive for consumers, but also for energy providers. While the Inflation Reduction Act put money in the hands of utility companies to invest in renewable resources, energy companies are still spending more money to produce energy unsustainably. A policy and technology company, Energy Innovation, released a report stating that nearly all of the current coal-powered energy processes in the United States would be cheaper if they were instead run by renewable energy sources.

Synthetic Fuels Are One Piece Of The Sustainable Puzzle

Nowadays, it seems that every other company is announcing a deadline to cut carbon emissions. But what does that look like, and how are these companies actually being held to that time frame? Earlier this year, the Sierra Club published a study arguing that utilities and companies that have specific timelines, even ones with dates reaching 25-plus years into the future, are unlikely to reach those benchmarks.

Why? Simply put, the companies aren’t acting quickly enough to achieve those goals realistically, said Sierra. Part of the problem is a lack of a non-renewable transition strategy. Another part of the problem is a “one and done” or “all or nothing” approach. Rather than solar or wind being the sole energy source, renewables can be viewed as a spectrum or collection of energy sources that can work together in order to meet global energy needs.

The development and testing of eFuels, although not entirely carbon-neutral, fits into that spectrum.

How Porsche Plans For A Complementary Fuel To Electrification

Porsche stated that the switch to electric mobility isn’t happening at a rate quick enough to satisfy the outlines of the Paris Agreement, the global and legally binding United Nations climate action treaty. Although solar, wind, and other renewable energy sources are growing and huge contributors to reducing carbon emissions in the electricity and fuel sectors, the complete switch to green energy will be difficult without a combination of several sources. Sustainable green fuels, like methanol, offer an additional source of nearly carbon-neutral energy.

“We urgently need a solution for operating existing fleets of vehicles in a sustainable way,” Michael Steiner, a Porsche Executive Board for Research and Development member, said. “This goal can be achieved with green fuels, which are a sensible complement to electric vehicles.”

How Porsche’s Investment Will Alter The Energy Sector

The investment in green fuels isn’t just set to change the auto industry, but the energy industry as a whole. As utilities and oil companies are slammed with criticism and accusations of “greenwashing” following the global climate summit, Porsche is attempting to make the transition away from fossil fuels smoother by testing and selling the closest thing to gasoline: a liquid substance that acts similar to gas and is simpler to transport compared to gaseous hydrogen.