1、 March 2024 OIES Research Paper:ET 30 E-diesel in the shipping sector:Prospects and challenges Nesrine Souissi M.Sc.i The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.The conten

2、ts of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its members.Copyright 2024 Oxford Institute for Energy Studies(Registered Charity,No.286084)This publication may be reproduced in part for educational

3、 or non-profit purposes without special permission from the copyright holder,provided acknowledgement of the source is made.No use of this publication may be made for resale or for any other commercial purpose whatsoever without prior permission in writing from the Oxford Institute for Energy Studie

4、s.ISBN 978-1-78467-233-1 ii The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Contents Contents.ii Figures and Tables.ii Acknowledgments.iii Introduction.1 1.E-diesel:Production

5、process and implementation challenges.2 2.Environmental requirements for the production and use of liquid e-fuels in the maritime sector.4 3.Economic efficiency assessment.5 3.1 Scenarios development.5 3.2 Assumptions.7 3.3 Findings and interpretation.8 3.4 Comparative assessment of the results.14 4

6、.Sensitivity assessment.18 4.1 WACC.18 4.2 CO2 Prices.19 4.3 Multifaceted sensitivity assessment:Analysing the collective impact of various elements.20 Conclusion.22 Appendix A.1:Model and formula.23 Appendix A.2.27 References.28 Figures and Tables Figure 1:E-diesel production process scheme.3 Table

7、 1:Anticipated Levelized Costs of Electricity(LCOE)across the three examined regions through 2050.6 Figure 2:Estimated e-diesel production costs.8 Figure 3:Estimated e-diesel production costs in 2023 in$/kg(e-diesel).9 Figure 4:Cost breakdown per kg of green hydrogen produced in the US(2023)in$/kg(H

8、2).10 Table 2:Average production costs of green hydrogen by renewable electricity sources.12 Figure 5:Cost Breakdown for e-diesel production in$/kg(H2)Chile Patagonia-2050.13 Figure 6:Cost breakdown for e-diesel production in%in Chile Patagonia,2050 alternative perspective.14 Figure 7:Cost compariso

9、n of e-diesel production costs in Chile,Patagonia with conventional marine diesel.15 Figure 8:Benchmarking estimates:Validating e-diesel model results through literature review.16 Figure 9:Production costs for renewable fuels in 2030 and 2050.17 Figure 10:Variation of e-diesel production costs in Ch

10、ile,Patagonia for different WACC.18 Figure 11:Marine diesel price with increasing CO2 tax-2030.19 Figure 12:Marine diesel price with increasing CO2 tax versus e-diesel production costs in Chile Patagonia.20 Figure 13:Comparison of e-diesel and conventional marine diesel prices in$/kg in Chilean Pata

11、gonia-2030 Optimistic scenario:Exploring varied efficiencies and considerations.21 Table A.2:Selected worldwide PtX projects.27 iii The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Memb

12、ers.Acknowledgments The author expresses gratitude to Dr.Rachid Cherkaoui from EPFL Lausanne,Switzerland,for engaging in insightful discussions related to the research.Special acknowledgment is also extended to Aliaksei Patonia and Martin Lambert,as well as Professor Dr.Ing Albert Moser and Julian W

13、alter from RWTH Aachen University,Germany,for providing valuable feedback and extensive expertise contributions throughout the duration of the project.Special thanks are extended to Dr.Bassam Fattouh for his valuable feedback on the draft of this paper.It is noted that the authors bear sole responsi

14、bility for any errors,omissions,opinions,and interpretations presented herein.1 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Introduction According to the European Commissio

15、n(European Commission 2023a),the maritime transport sector,mainly based on petroleum products derived from crude oil,currently emits around 11%of the transport global greenhouse gases(GHGs),while handling over 90%of the worlds goods(King 2022).These emissions are expected to increase significantly b

16、y 2050 in various development scenarios,representing a potential increase about 130%compared to 2008(European Commission 2023b).To address this challenge,the International Maritime Organization(IMO)has formulated ambitious targets with the aim to phase out fossil fuels,peak total GHG emissions from

17、international shipping as soon as possible and achieve a reduction of at least 50%by 2050 compared to 2008 levels (European Commission 2023b).Accomplishing these objectives poses significant challenges given the increased propulsion power needed and the constrained space available for expanding the

18、required renewable infrastructure.This sector,known as hard-to-abate”sector,poses a particular difficulty for decarbonization(Neuling and Berks 2023).In principle,liquid fossil fuels can be replaced by alternative options such as biofuels or electricity-based fuels(e-fuels).Biofuels,which are derive

19、d from microbial,plant,or animal materials,are characterized by significantly lower GHG emissions compared to fossil fuels and therefore contribute to reducing the climate impact of the transport sector(Neuling and Berks 2023).This advantage arises from the fact that biofuels originate from organic

20、matter such as plants or algae,which sequester carbon dioxide during their growth phase.Consequently,when biofuels are burned,the released CO2 is partially offset by the carbon previously absorbed during the feedstocks cultivation,resulting in reduced net carbon emissions relative to fossil fuels(Li

21、tvak and Litvak 2020).Particularly,advanced biofuels crafted from waste materials or algae hold promise for achieving carbon neutrality or even negativity(Litvak and Litvak 2020).However,these fuels,especially conventional biofuels from cultivated biomass,inherently require a lot of water and land,w

22、hich potentially competes with food cultivation.They can therefore at best be regarded as a temporary transitional solution but not for the long-term(Neuling and Berks 2023).E-fuels,produced by extracting hydrogen using electricity from renewable sources,offer a sustainable alternative which can sig

23、nificantly reduce GHG emissions whilst not jeopardizing other environmental requirements regarding biodiversity,air quality and material sourcing.Notably,a recent survey conducted by Accelleron,involving high-level executives from Germany,the Netherlands,Belgium,and Spain,revealed that about 93%of m

24、aritime companies envision e-fuels as pivotal in fostering more sustainable shipping(Acceleron 2023).A notable research project demonstrating progress in this field is the Clean Maritime Demonstrator Competition,where CATAGEN led a consortium that won funding for a techno-economic feasibility study

25、to explore the production and distribution of e-diesel,aiming to deliver significant decarbonization to the UKs maritime activities(McKeown 2024).Supported by the UK Department for Transport and Innovate UK,this project seeks to determine the commercial viability of using CATAGENs E-FUEL GEN technol

26、ogy to produce e-diesel.Moreover,it aims to establish a replicable model for adoption across various harbors and ports in the UK,with potential global applicability(McKeown 2024).Nevertheless,the decarbonization of the maritime sector should encompass considerations beyond environmental aspects alon

27、e to comprehensively evaluate the feasibility of these alternative fuels.So how viable are e-fuels,specifically liquid e-fuels,in the process of decarbonizing the shipping sector,and under what conditions can they successfully compete with conventional maritime fuels?This paper is centered on examin

28、ing the potential contribution of liquid e-fuels,specifically e-diesel,within the maritime sector.It addresses the environmental and economic viability of e-diesel in the maritime context and the essential considerations for its successful competition with traditional marine fuels like Marine Diesel

29、 Oil(MDO),Marine Gasoil(MGO),and Heavy Fuel Oil(HFO)until the year 2050.2 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.1.E-diesel:Production process and implementation chall

30、enges In the journey towards decarbonizing the maritime sector,e-diesel stands out as a promising alternative fuel synthesized through the Fischer-Tropsch process and renewable electricity(McGill et al.2013).As an alternative to fossil marine fuels,e-diesel holds appeal owing to its high drop-in qua

31、lity.It boasts a very high energy density per km and its high cetane number enhances engine efficiency,facilitating a swift market penetration (Fasihi et al.2016).It closely resembles petroleum-based diesel fuel,boasting compatibility with both new and existing diesel engines and fuel systems.Moreov

32、er,it adheres to current diesel fuel specifications(ASTM D 975)and maintains safety standards akin to traditional diesel fuel (Medrano-Garca et al.2022).This allows it to be legally used in existing diesel infrastructure and ships.Additionally,its superior low-temperature operability compared to bio

33、diesel makes it a viable option for deployment in colder climates without operational issues like gelling or clogging fuel filters (Medrano-Garca et al.2022).Regarding storage and logistics,liquid e-diesel enjoys favorable conditions,leveraging existing storage facilities owing to their compatibilit

34、y.When sourced from renewable energy,e-diesel presents a climate-friendly marine fuel,showcasing a substantial reduction in greenhouse gas(GHG)emissions (Fasihi et al.2016).Moreover,this fuel holds the potential to significantly lower sulfur and nitrogen oxide emissions,contributing to improved air

35、quality and ecosystem health in coastal areas and sensitive marine ecosystems(McGill et al.2013).While the use of e-diesel in the shipping sector opens various opportunities,its widespread adoption is accompanied by significant challenges.Primarily,e-diesel production faces hurdles concerning produc

36、tion scalability,cost competitiveness,infrastructure readiness,and policy frameworks(Medrano-Garca et al.2022;Neuling and Berks 2023).Compared to the direct utilization of electricity,e-diesel production incurs high energy conversion losses,leading to an overall efficiency of less than 50%,resulting

37、 in substantially higher costs compared to using electricity directly(Neuling and Berks 2023;Zang et al.2021).Moreover,the current availability of e-diesel remains limited,with only a handful of companies investing in its production.For instance,the U.S.currently has a capacity of 297 million gallon

38、s of e-diesel,while Neste Oil in Europe has a capacity of approximately 244 million gallons(Tan and Tao 2019).Other companies,such as Nippon Oil in Japan,BP in Australia,Syntroleum and Tyson Foods in the United States(Dynamic Fuels),and UOPEni in Italy and the United States have plans to produce e-d

39、iesel in the future(Tan and Tao 2019).Another significant challenge for the use of e-diesel in the shipping sector arises from the lack of established policy frameworks and certifications,hindering the widespread adoption of e-diesel and other e-fuels in the maritime sector.Indeed,e-diesel lacks cle

40、ar guidance for its production and use(Foreticha et al.2021;Neuling and Berks 2023).Addressing these policy gaps and establishing robust regulatory frameworks are crucial steps towards facilitating the integration of e-diesel into the maritime industrys sustainable transition.Having outlined the cha

41、llenges and opportunities surrounding the adoption of e-diesel in the maritime sector,its imperative to delve into its production process.This mainly requires hydrogen and carbon dioxide inputs(See figure 1).Electrolysis is considered one of the simplest and cleanest methods of producing hydrogen.It

42、 demands approximately 50 kWh of electricity to split water into H2 and O2 and produce one kg of green hydrogen (Bullmann et al.2020).Depending on the temperature level at which this process takes place,a distinction can be made between so-called low-temperature and high-temperature electrolysis(Bul

43、lmann et al.2020).The most widely used low-temperature technology at present is the alkaline electrolysis(AEL).In recent years,polymer electrolyte membrane electrolysis(PEMEL)and anion exchange membrane electrolysis(AEMEL)have gained prominence as alternative low-temperature electrolysis processes,o

44、ffering greater load flexibility,especially when coupled with variable renewable electricity sources.Solid oxide electrolysis(SOEL)is a high-temperature electrolysis that works at significantly higher temperatures and requires water vapor as an input material(Bullmann et al.2020).One variant of SOEL

45、 is the so-called co-electrolysis,in which CO2 is used as a starting material in addition to water vapor,resulting directly in a syngas consisting of hydrogen and carbon monoxide(CO).This variant could be interesting to produce e-diesel.However,compared to the low-temperature 3 The contents of this

46、paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.electrolyzers,high-temperature processes have so far only been realized in smaller demonstration plants(Bullmann et al.2020;Neuling and Berks 2023)Fi

47、gure 1:E-diesel production process scheme Source:Authors own illustration.This paper focuses on employing AEL technology as the primary method for supplying green hydrogen for e-diesel synthesis,due to its maturity and lower costs,as it has been used in industry for around 100 years(Bullmann et al.2

48、020).Furthermore,in terms of durability,cold-start capability and system costs,alkaline electrolysis is currently still ahead of the other three processes (Bullmann et al.2020).However,it is important to mention that in terms of compactness and flexibility(partial load capability and ramp-up speed),

49、PEM electrolysis is more advantageous and that in the long term,SOEC electrolysis is expected to have considerable potential for cost degression and increased efficiency (Bullmann et al.2020).Carbon dioxide can be sustainability collected with Direct Air Capture(DAC)technology.A comprehensive explan

50、ation for choosing this method over other more economical alternatives will be elucidated in the climate change assessment.The DAC process captures CO2 directly from the atmosphere with three basic steps that produce two outputs:concentrated CO2 and filtered air(Pues 2022).First,fans are used to dir

51、ect ambient air onto a sorbent(Pues 2022).This binds the CO2 to itself and helps separating CO2 from the other substances in the air.In a further process step,the CO2 is separated from the sorbent again,usually by adding thermal energy,so that pure CO2 is available at the end of the process chain.Th

52、is can then finally be used to produce e-diesel(CBinsights 2021;Neuling and Berks 2023).Direct Air Capture(DAC)currently incurs costs ranging from 800-1000$/t(CO2)(Webb et al.2023).However,according to estimates by Climeworks,these costs are projected to decrease to 400-700$/t(CO2)by 2030 and furthe

53、r down to 100-300$/t(CO2)by 2050(Webb et al.2023).These costs can be further reduced through supportive policies,market development,commercialization,and mass deployment(CBinsights 2021;Pues 2022).In the fuel synthesis stage,hydrogen combines with captured carbon dioxide in a Reverse Water Gas Shift

54、(RWGS)reactor to generate carbon monoxide(CO).The produced mixture,characterized by a H2/CO ratio of two,is then introduced into the Fischer-Tropsch(FT)reactor.The Fischer-Tropsch synthesis is a mature technology which has been known since the beginning of the 20th century and was originally develop

55、ed to produce synthetic diesel from coal gasification(Grahn et al.2022).The product of the subsequent FT synthesis is a mixture of different hydrocarbons,which is often referred to as synthetic crude oil or syncrude for short.This syncrude can be further processed in conventional 4 The contents of t

56、his paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.refinery processes(including cracking,isomerization and distillation)to produce e-diesel(Marchese et al.2021;Neuling and Berks 2023).The realizat

57、ion of the RWGS reaction is currently the biggest technical challenge in e-diesel production.In fact,for commercial implementation of RWGS at the scales needed to replace fossil feedstocks with CO2,new catalysts must be developed to suppress the competing methanation reaction completely while mainta

58、ining stable performance at elevated temperatures and high conversions producing large quantities of water(Grahn et al.2022).2.Environmental requirements for the production and use of liquid e-fuels in the maritime sector The escalating contributions of shipping to acidification,eutrophication,clima

59、te change,and the adverse effects on human health have become a growing cause for concern.These contributions stem from the increasing emissions released into the air by shipping(Toscano 2018).Notably,approximately 70%of air emissions from shipping occur within a 400-kilometer radius of land,undersc

60、oring the particularly significant potential impact on coastal communities(Toscano 2018).The United Nations Framework Convention on Climate Change(UNFCCC)identifies carbon dioxide(CO2),Methane(CH4),and nitrous oxide(N2O)as primary contributors to climate change that must be mitigated within the ship

61、ping sector(Beverly et al.2022).Furthermore,the International Maritime Organization(IMO)has delineated six additional substances,including nitrogen oxides(NOx),sulfur oxides(SOx),particulate matter,carbon monoxide,non-methane volatile organic compounds,and soot,whose emissions necessitate control me

62、asures(Beverly et al.2022).These complexities highlight the importance of analyzing the sustainability of e-diesel for the shipping sector.However,this analysis should extend beyond emissions,encompassing various factors.This section explores the prerequisites for environmentally friendly e-diesel,e

63、xamining diverse aspects of sustainability beyond environmental concerns to encompass social dimensions.If derived from renewable sources like wind or solar power,resulting e-diesel achieves a 99%reduction in GHG emissions,from a well-to-wake perspective,whereas e-diesel from fossil electricity sour

64、ces is estimated to be more harmful than conventional marine fuels which emphasizes the importance of using renewable electricity(Lindstad et al.2021).In light of the prevailing global electricity mix,which is predominantly fueled by non-renewable sources,the demand for dedicated facilities for hydr

65、ogen and e-fuels production arises,aimed at preventing conflicts with other ongoing decarbonization efforts(Neuling and Berks 2023).Ensuring an overlay of electricity generation is therefore crucial for enhancing the accessibility of international projects and balancing these considerations is pivot

66、al for the sustainable development of e-diesel and e-fuels more generally on a global scale(Umwelt Bundesamt 2023).Moreover,achieving independent renewable electricity sources for a specific sector or project proves technically intricate,requiring separation from the existing complex grid,and entail

67、s governmental interventions and permissions.The considerable renewable electricity demand comes also with land use aspect which demands attention.Indeed,the annual global marine fuel consumption is projected to be around 330 million metric tons(87 billion gallons)annually and is expected to double

68、by 2030 due to the increase in global trade (Tan et al.2020).To produce this quantity entirely synthetically,an approximately estimated 6,700 terawatt-hours of renewable electricity would be required.This is roughly 27%of the global electricity consumption in 2022.If this electricity were to be gene

69、rated using photovoltaic installations in one of the worlds most cost-effective locations in South America,around 2,948 GW would need to be newly installed(Neuling and Berks 2023).This corresponds to about 2.5 times the installed photovoltaic capacity in the entire world(1,185 GW)(iea 2023).The requ

70、ired area for this would be approximately 67,737 km2,based on calculations conducted by the author.To put this into perspective,this area surpasses more than twice the land area of Belgium(WorldData 2024).With onshore wind turbines,the required capacity(2,948 GW)would be lower due to achieving more

71、full load hours compared to photovoltaic installations,however,the land area needed for onshore wind turbines would be about 349,829 km2(Neuling and Berks 2023).Nevertheless,the spacing areas between the wind turbines can be repurposed for other uses,significantly reducing the net land requirement (

72、Neuling and Berks 2023).The desert Atacama in Chile is one of the driest places in the world and one of the few where annual irradiance exceeds 2,500 kWh.m2(Neuling and Berks 2023).Producing the entire fuel demand in the EU for the marine sector,which represents about 19%of the 5 The contents of thi

73、s paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.global marine fuel consumption,counts for 1,273 TWh from photovoltaic installations.This would require approximately 509.2 km2 for 21.7 GW,which re

74、presents three times the installed capacity in the whole country in 2023(Statista 2023).This is only for the shipping sector which represents about 10%of the demand for gasoline and diesel in the Europe (Neuling and Berks 2023).Any additional transportation segment adopting e-diesel or e-fuels in ge

75、neral implies further utilization of significant land areas and favorable locations for power generation in other countries.However,such regions are globally scarce and require efficient utilization.This example illustrates that e-diesel cannot realistically be an option for achieving a complete sub

76、stitution of marine fuels consumption in the EU,even with imports from favorable regions.Another factor to consider is the substantial volumes of freshwater required for the production of e-diesel.Specifically,the production of one liter of e-diesel requires approximately 3.6 liters of high-quality

77、drinking water,primarily for hydrogen electrolysis(Bullmann et al.2020).Recognizing the escalating water demand due to population growth,industrial projects like e-fuel production must not exacerbate freshwater availability or compromise quality for local communities,mindful of present and future ne

78、eds amidst the backdrop of climate change(Beverly et al.2022).Consequently,in arid regions,distinguished by ample solar energy potential,the imperative for seawater desalination becomes apparent,albeit with the associated consequence of a further increase in electricity demand.Another essential cons

79、ideration in e-diesel production is the source of carbon dioxide,which should adhere to a closed cycle.This mandates the utilization of renewable carbon with a focus on avoiding negative externalities such as adverse impacts on land use(Mahler 2021;Neuling and Berks 2023).The first possibility is to

80、 gather CO2 from biomass,biogas,and biogenic residues.Nevertheless,this may rise sustainability concerns,encompassing land competition with the food industry and indirect land-use changes,limiting the futures sustainable carbon availability(Pues 2022).As consequence,relying solely on carbon from bio

81、genic sources might fall short of meeting the long-term demand for e-fuels needed to achieve climate objectives(Neuling and Berks 2023).A second alternative is to collect CO2 from industrial point sources,such as emissions from coal plants.Nevertheless,this method lacks the assurance of a closed car

82、bon cycle and cannot be deemed renewable(Mahler 2021).Direct Air Capture(DAC)stands out as a method providing a fully closed carbon cycle for liquid e-fuels production.DAC ensures a complete carbon cycle closure,recycling all the CO2 it produces,so that when the synthetic fuel is utilized,only the p

83、reviously extracted atmospheric CO2 is released(Mahler 2021;Neuling and Berks 2023).Moreover,DACs advantages extend to its siting flexibility,as it does not require arable land and its location independence allows it to tap into significant atmospheric CO2 for synthesis processes(Mahler 2021).Despit

84、e its potential,the current low scalability of DAC,coupled with relevant energy requirements due to the low CO2 concentration in the atmosphere,renders this method scarce and expensive(Neuling and Berks 2023).However,there are high expectations for cost reduction until 2030 and beyond(CBinsights 202

85、1;Webb et al.2023).Another critical aspect involves resource utilization in e-diesel production.The synthesis processes catalysts contain rare metals like platinum or iridium,limited to a few extraction sites(Bullmann et al.2020).It is therefore imperative to conduct further research to reduce the r

86、equired quantities and explore substitution and recycling methods(Bullmann et al.2020).3.Economic efficiency assessment A model has been formulated to evaluate the economic efficacy of e-diesel,considering the technologies outlined in the environmental assessment.The scenarios under consideration ar

87、e introduced alongside the assumptions made,and detailed explanations are provided regarding the cost calculations.The formula used for cost estimation is outlined in the Appendix A.1.Additionally,a sensitivity analysis is conducted,followed by a comprehensive discussion of the overarching results.3

88、.1 Scenarios development Given that electricity costs are the predominant factor influencing e-diesel production costs(Fasihi et al.2016;Neuling and Berks 2023),the selection of scenarios is guided by the search for regions characterized by the lowest and most competitive costs of renewable energy s

89、ources.This paper considers photovoltaic(PV)and wind power plants as sources of renewable electricity.The chosen countries for examination are Chile,Australia,and the United States.This choice primarily stems from 6 The contents of this paper are the authors sole responsibility.They do not necessari

90、ly represent the views of the Oxford Institute for Energy Studies or any of its Members.the availability of data and the clear commitment of these nations to participate in hydrogen-based projects globally(IRENA 2023).Table 1:Anticipated Levelized Costs of Electricity(LCOE)across the three examined

91、regions through 2050 Region Technology Scenario Optimistic Reference Pessimistic Unit$/MWh(el)$/MWh(el)$/MWh(el)Chile(Atacama)PV Present 42(1)42(1)42(1)2030 15(2),(3),(4)18.75(Average)30(5)2050 12(4)13.33(Average)14(6),(7)Chile(Patagonia)Wind Onshore Present 30(1)30(1)30(1)2030 20(8),(9)22 24(10,11)

92、2050 10(8)14.5(Average)19(12)Australia PV Present 41(1)41(1)41(1)2030 20(12)24.75(Average)27(13),(14)2050 16.92(15)19.97(Average)23(16)United States Wind Onshore Present 32(1),(20)32(1),(20)32(1),(12)2030 28(17)28.67(Average)30(18),(19)2050 24(1)25(Average)26(18)Sources:(1)(IRENA 2023),(2)(Tai et al

93、.2022),(3)(Hydrogen Central 2021),(4)(Smart city Korea 2021),(5)(Bellini 2019),(6)(Wood Mackensie 2022),(7)(Djunisic 2022),(8)(Satymov et al.2022),(9)(Fasihi et al.2016),(10)(Breyer 2018),(11)(Heuser 2020),(12)(Pri 2019),(13)(Carroll 2023),(14)(Kitchen 2022),(15)(Csiro 2022),(16)(Mayer 2015),(17)(Wi

94、ser and Bolinger 2022),(18)(Kramer and Jones 2020),(19)(OffshoreWind.biz 2021),(20)(Berkeley Lab 2021)The paper thoroughly investigates the chosen regions across three scenarios:optimistic,reference,and pessimistic.The optimistic scenario prioritizes the most advantageous values,whereas the pessimis

95、tic scenario integrates the least favorable ones.In the reference scenario,an average is computed from all available sources.Various Levelized Costs of Electricity(LCOE)are analyzed for the years 2023,2030,and 2050,presenting a comparative overview of the four regions.Detailed numerical data can be

96、referenced in Table 1 above.Chile:Atacama Desert and Patagonia Region Chile is a key player in renewable energy,leveraging PV technology in the Atacama Desert and harnessing wind energy in the Patagonia region.On the one hand,renowned for having one of the highest solar irradiance levels globally,Ch

97、iles northern region,marked by high altitude,frequent cloud absence,and lower levels of ozone and water vapor,emerges as a prime location for photovoltaic(Hydrogen Central 2021;IRENA 2023).The Atacama Desert demonstrates a photovoltaic(PV)capacity of 1,800 GW,surpassing the capacity factors of the b

98、est locations in Africa,the Middle East,and Australia by over 20%(IRENA 2023).On the other hand,the Patagonia region in Chile exhibits very high onshore wind capacity factors(IRENA 2023).Moreover,Chiles ambitious plans for hydrogen electrolysis,targeting a Levelized Cost of Green Hydrogen(LCOH)below

99、 1.50$/kg(H2)by 2030,positions the country as a competitive hub for e-diesel production(Smart city Korea 2021).Australia:Solar Energy Leveraging its high solar irradiation levels on the western and southern coasts,Australia anticipates solar PV to be the most cost-effective energy source by 2050(iea

100、 2023).The country has an established access to critical natural resources,a high GDP per capita,and a robust supply-chain infrastructure.7 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of

101、its Members.Additionally,Australia demonstrates one of the lowest estimated levelized costs of hydrogen globally,expected to reach approximately 1.7$/kg(H2)by 2030(Smart city Korea 2021).This positions Australia as a key player in the pursuit of cost-effective and sustainable e-diesel.United States:

102、Wind Energy As the worlds largest economy with abundant renewable resources,endowed with abundant renewable energy resources,the US is positioned to establish a secure and dependable energy system founded on renewable energy(IRENA 2023).Notably,the United States possesses renewable resources that su

103、rpass its annual electricity needs by a factor of 100,underscoring its immense potential for renewable energy utilization.The wind energy sector plays a pivotal role in the countrys energy landscape.Furthermore,the US aims for a remarkably low estimated cost of green hydrogen production,projected to

104、 be as low as 2.1$/kg(H2)by 2030(Smart city Korea 2021).This positions the US as a significant player in the global pursuit of affordable and environmentally friendly liquid e-diesel.3.2 Assumptions The analytical framework of this research relies on a series of fundamental assumptions.Firstly,the p

105、roduction of e-diesel is presumed to occur without interference from regulatory hurdles,legal challenges,or external disturbances.Geopolitical stability is assumed,with conflicts and international tensions excluded from the analysis.Additionally,unimpeded public acceptance of e-diesel is assumed,wit

106、hout significant resistance or social barriers.The assumption extends to unrestricted e-diesel production,implying that resource availability,technological limitations,and logistical constraints will not impede the process.The primary focus is on e-diesel,leveraging existing infrastructure.Co-locati

107、on of renewable energy,hydrogen,and e-diesel synthesis is assumed to reduce transport and distribution costs,streamline infrastructure development,and enhance overall efficiency.The model assumes exclusive reliance on renewable electricity sources to meet the energy demands of the entire process.Giv

108、en the limited availability and geographical dispersion of surplus electricity,occurring for only a few hours annually in small quantities,it is assumed that electricity is derived from supplementary and newly established renewable capacities.Moreover,capacity limitations for renewable energy source

109、s are not factored into the analysis,with the assumption that a sufficient electricity supply exists to meet the requirements of the whole process.The closed carbon dioxide cycle with Direct Air Capture(DAC)is considered,in spite of the current demonstration phase and associated limitations.Despite

110、these limitations,the analysis considers large-scale conversion facilities,leveraging economies of scale and anticipating future market penetration for additional cost reductions(Neuling and Berks 2023).It is important to mention that the electricity requirement for the DAC process step is heavily i

111、nfluenced by whether waste heat from other subprocesses available and what portion of the heat demand is needed to be generated electrically(Neuling and Berks 2023;Pues 2022).Since a detailed process simulation is beyond the scope of this paper,an assumption of an independent electricity requirement

112、 for the carbon dioxide is made.The model restricts the analysis to low-temperature electrolysis for hydrogen production,a decision driven by the developmental phase of solid oxide electrolysis cell(SOEC)electrolysis and the uncertainty surrounding its future applications.Moreover,the limitations of

113、 high-temperature electrolyzers,characterized by constrained dynamic response and mechanical strain on ceramic materials during temperature fluctuations,render them less suitable for volatile energy systems compared to the more dynamically responsive low-temperature water electrolysis processes(Bull

114、mann et al.2020;Kasten 2020).The models foundation rests on the application of alkaline electrolysis(AEL),while the utilization of proton exchange membrane(PEM)technology is reserved for examination within the scope of sensitivity analysis,due to supply risks associated with critical elements such a

115、s platinum and iridium(Ausfelder and Dura 2018).The assessment also considers efficiency losses,conversion costs,and technological advances.Water desalination is the exclusive source of water,and associated costs are integrated into the model.In the Fischer-Tropsch process,carbon monoxide is generat

116、ed from carbon dioxide through the reverse water-gas shift(RWGS)reaction,validated by literature,and identified as the most suitable approach for producing carbon monoxide within the context of the Fischer-Tropsch process.The Fischer Tropsch plants capacity is contingent on the electrolyzers capacit

117、y,but when accounting for existing e-diesel 8 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.projects,the Fischer Tropsch plants capacity can potentially extend to 250 MW,as i

118、llustrated in Table A.2 in Appendix A.2.To align the entire process with Fischer-Tropsch requirements,hydrogen storage is incorporated,ensuring uninterrupted fuel synthesis(Kasten 2020).For the utilization of compressed hydrogen storage,a well-established method,costs remain consistent across countr

119、ies and are derived from average values reported in existing literature,amounting to 0.35$/kg(H2)(Guel 2022;Perner et al.2018;Schimmel 2022).The annual stored volume of hydrogen is calculated by deducting the quantity required for the Fischer-Tropsch process from the total produced,while considering

120、 the remaining volume stored from the previous year.These collective assumptions form the foundation for the comprehensive cost calculation presented in this paper.The overall costs are computed using the annuity method.An annuity is a regular payment over a certain period of time(Moser 2020).Accord

121、ing to the annuity method,the sequence of periodic variable payments and receipts,considering the interest effect,is converted into annual average values (Moser 2020).The calculation includes capital investment1,operating costs2,anticipated efficiency improvements3,and refining,processing,and condit

122、ioning costs.Load hours are determined based on the full load hours of corresponding technologies.3.3 Findings and interpretation In the following examination,the model outcomes are unveiled,delving into the economic aspects of e-diesel expenses across three crucial timeframes:2023(Present),2030,and

123、 2050.The estimated production costs for e-diesel across various regions and scenarios are depicted in Figure 2 using a box and whisker diagram.Within the diagram,the upper portion of the box represents the pessimistic scenario,the cross inside the box represents the reference scenario,and the lower

124、 portion of the box reflects the optimistic scenario.Figure 2:Estimated e-diesel production costs Source:Authors own calculation and illustration.1 Specific power costs for the Fischer Tropsch plant in$/MW:Present(2023):optimistic scenario:424,000,reference scenario:913,000,pessimistic scenario:2,22

125、6,000;2030:optimistic scenario:318,000,reference scenario:653,000,pessimistic scenario:1,091,000;2050:optimistic scenario:212,000,reference scenario:414,000,pessimistic scenario:562,000.2 Fixed operating cost per year for the Fischer Tropsch plant in%:Optimistic scenario:3%,reference scenario:3.25%,

126、pessimistic scenario:4%3 Efficiency for the Fischer Tropsch plant in%:Present(2023):optimistic scenario:80%,reference scenario:73.6%,pessimistic scenario:59%;2030-2050:optimistic scenario:80%,reference scenario:76.3%,pessimistic scenario:73%9 The contents of this paper are the authors sole responsib

127、ility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Present perspective(2023):Unveiling the current economics of e-diesel In light of the current costs of renewable energies across the considered regions,which have been derived from the

128、data provided in Table 1,with wind energy averaging a levelized cost of electricity(LCOE)of 31$/MWh and solar PV at 41$/MWh,the production of one kg of green hydrogen incurs average costs of 3.52$/kg and 4.04$/kg,respectively.Water desalination facilities can generate water at an average cost of 0.5

129、2$/t(H2O)with wind energy and 0.56$/t(H2O)with solar energy equivalent to 0.162$/MWh(H2)and 0.172$/MWh(H2)of hydrogen output,considering that the production of one kilowatt-hour of hydrogen necessitates approximately 0.31 kilograms of water (Bullmann et al.2020;Schimmel 2022)The average cost of capt

130、uring CO2 from ambient air is 152.71$/t(CO2)for wind energy and 174$/t(CO2)for solar PV.The outcomes highlight that electricity costs,impacted by factors such as technology,capital costs,and regional capacity factors,play a pivotal role in influencing production costs.Differences in the Weighted Ave

131、rage Cost of Capital(WACC)among locations have a noteworthy impact on investment costs,yet the predominant influence is attributed to electricity costs.This can be illustrated by the example of wind onshore Chile Patagonia with a higher WACC(6.1%)compared to the US(5.2%),but the costs per ton of CO2

132、 captured,as well as per kg of H2 and e-diesel produced,are lower,underscoring the pivotal role of electricity costs (Neuling and Berks 2023).The detailed outcomes regarding the production costs of one kilogram of e-diesel in the present(2023)are presented in Figure 3 below.Analysis of these costs f

133、or the US in 2023 showcases significant variations among scenarios.For instance,in the US,despite identical LCOE values,total costs per kg of e-diesel range from$2.76(optimistic)to$11.94(pessimistic).This emphasizes the substantial impact of factors beyond LCOE,underscoring the significance of inves

134、tments and fixed operating costs.To facilitate a deeper understanding of the cost breakdown in the final production expenses,the example of the United States,evaluating both pessimistic and optimistic scenarios,is scrutinized.In the optimistic scenario,the investment costs,encompassing RWGS,Fischer-

135、Tropsch,and fuel upgrading are equal to 0.0531$/kg(e-diesel)(1.92%of the total costs).Conversely,in the pessimistic scenario,these costs experience a significant escalation,reaching 0.3779$/kg(e-diesel)(3.17%).Similarly,fixed operating costs demonstrate a noteworthy rise from 0.0016$/kg(e-diesel)(0.

136、06%)in the optimistic scenario to 0.0151$/kg(e-diesel)(0.13%)in the pessimistic scenario.Figure 3:Estimated e-diesel production costs in 2023 in$/kg(e-diesel)Source:Authors own calculation and illustration.Electricity costs remain consistent across all scenarios at 0.0347$/kg(e-diesel)(1.26%,optimis

137、tic and 0.29%,pessimistic)at the present time.Since the LCOE represents actual costs,these figures remain uniform for the three scenarios in 2023.It is imperative to note that the electricity costs mentioned pertain exclusively to the electricity consumed during FT synthesis,with the costs incurred

138、in the preceding 02468101214OptimisticReferencePessimisticCosts in$/kgScenariosCh-AtacamaCh-PatagoniaAustraliaUS 10 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.processes li

139、ke the water electrolysis included in the corresponding input.This principle applies also to both operating and investment costs(OPEX and CAPEX).Hydrogen costs,constituting the largest share of total costs,undergo a sharp increase from 2.3337$/kg(e-diesel)(84.51%)to 10.9773$/kg(e-diesel)(91.94%).Thi

140、s consistent prominence underscores the critical and prevailing role of hydrogen production costs,maintaining a significant proportion of the final costs per kg of e-diesel produced.Upon analyzing the composition of hydrogen production costs,depicted in Figure 4 below,marked distinctions emerge acro

141、ss the optimistic and pessimistic scenarios.For instance,investment costs account for 8.62%of total costs in the optimistic scenario,while in the pessimistic scenario,they rise significantly to 34.55%.Fixed operating costs rise from 2.30%in the optimistic scenario to 38.20%in the pessimistic scenari

142、o.Meanwhile,electricity costs remain relatively stable in terms of amount but decrease significantly in percentage terms(from 88.51%to 27.24).This deviation indicates that electricity costs consistently play a central role in the overall cost structure,regardless of fluctuations in the scenarios.The

143、 cumulative effect of these factors contributes to a substantial increase in total costs,from 1.74$/kg(H2)to 6.02$/kg(H2),primarily driven by elevated investment and operational costs in less favorable conditions.While relatively minor compared to other components,hydrogen storage costs exhibit an i

144、ncreasing trend from 0.0036%in the optimistic scenario to 0.074%in the pessimistic scenario.Despite constituting a very small percentage of the total costs in both scenarios,the variability in storage costsdespite a consistent cost per stored kilogram of hydrogencan be attributed to variable efficie

145、ncies and nominal power of electrolysis and Fischer-Tropsch plants.These factors impact the quantities of hydrogen and e-diesel produced and,consequently,the stored quantities of hydrogen per year.While optimizing produced quantities to minimize stored hydrogen may be a sensible approach,such consid

146、erations fall outside the scope of this paper.In total,the costs associated with producing one kilogram of e-diesel experience a substantial increase from 2.7614$/kg(e-diesel)in the optimistic scenario to 11.9397$/kg(e-diesel)(4.32 times higher)in the pessimistic scenario,underscoring the cumulative

147、 impact of various cost components,particularly the significant rise in hydrogen costs.Many of these factors will undergo further examination in the sensitivity analysis provided in section 4.Figure 4:Cost breakdown per kg of green hydrogen produced in the US(2023)in$/kg(H2)Source:Authors own calcul

148、ation and illustration.In essence,the contrast between pessimistic and optimistic scenarios highlights how e-diesel production costs are intricately influenced by several factors,notably electricity costs,WACC,and investment costs.Additionally,technical considerations such as plant efficiency and li

149、fespan also play significant roles.These results emphasize the importance of sound financial planning and risk management strategies to ensure the economic viability of e-diesel production projects,especially in challenging scenarios.11 The contents of this paper are the authors sole responsibility.

150、They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.2030 forecast:Navigating e-diesel costs in the near future The total production costs for e-diesel witness a significant decline by 2030,averaging a 42%reduction for the optimistic scenario,4

151、0%for the reference scenario,and 50%for the pessimistic scenario.This notable decrease can be attributed to various factors and parameters,primarily stemming from lower electricity generation costs that impact all input costs,especially hydrogen and carbon dioxide costs.Additionally,both the CAPEX a

152、nd OPEX of each technology decrease,accompanied by efficiency improvements,particularly in hydrogen production and Direct Air Capture(DAC),given that Fischer Tropsch synthesis is a mature technology with limited room for substantial improvements.Looking at the estimated costs of renewable energies i

153、n the regions analyzed,the average LCOE for wind energy is 25.44$/MWh(31$/MWh in 2023)and 22.58$/MWh(41$/MWh in 2023)for solar PV.The production costs for wind energy amount to 2.28$/kg for green hydrogen and 3.84$/kg for e-diesel(3.52 and 6.48 in 2023,respectively).For solar PV,the production costs

154、 are 2.15$/kg for green hydrogen and 3.45$/kg for e-diesel(4.04$/kg(H2)and 7.37$/kg(e-diesel)in 2023).To explore further the factors influencing the significant decrease in hydrogen costs and,by extension,e-diesel production costs,some data for the years 2023 and 2030 are presented in Table 2 below.

155、This data considers scaling effects and enhancements in efficiency and costs over time.As evident from the table,there is an overall enhancement in various parameters.Efficiency and nominal power show an increase,specific power costs experience a reduction,the systems lifespan extends,and both fixed

156、 and variable OPEX as well as the LCOE and water costs,witness a decline.The cumulative impact of these enhancements significantly contributes to the notable reduction in production costs.For the identified average LCOE,water desalination facilities can produce water at an average cost of 0.46$/t(H2

157、O)with wind energy(0.52 in 2030)and 0.44$/t(H2O)with solar PV(0.56 in 2030),equivalent to 0.141$/MWH(H2)(0.159 in 2030)and 0.138$/MWH(H2)(0.172 in 2030).The average cost of capturing CO2 from ambient air is projected to be 82.83$/t(CO2)(152.71 in 2030)for wind energy and 77.82$/t(CO2)(174 in 2030)fo

158、r solar PV.This reduction is foreseen through the implementation of deployment strategies and innovative approaches(Neuling and Berks 2023).Expenses related to Direct Air Capture(DAC)are contingent on factors such as capture technology,energy costs,plant configuration,and financial assumptions(Webb

159、et al.2023).In regions abundant in renewable energy resources,as depicted in the studied scenarios,coupled with advanced technologies for electricity and heat generation,it is conceivable that DAC costs may dip below 100$/t(CO2)by 2030,as evidenced in the developed model(European Commission 2023b;Gu

160、el 2022).Indeed,aligning global DAC deployment rates with The Net Zero Emissions by 2050 Scenario,a normative pathway outlining how the global energy sector can achieve net-zero CO2 emissions by 2050,and which aims to capture 90 million tons of CO2 in 2030 and 980 million tons in 2050,could result i

161、n a substantial reduction in Capital Expenditure(CAPEX)(Guel 2022).This reduction is projected to be substantial,with a potential decrease of 49-65%in 2030 and 65-80%in 2050 compared to 2020 levels.Regionally,it is anticipated that the CAPEX will be comparatively lower in China,the Middle East,the R

162、ussian Federation,and North Africa than in Europe and the United States.This regional variation is attributed to the availability of more cost-effective materials and manufacturing processes(Guel 2022).However,realizing this cost reduction potential is contingent upon increased support from both the

163、 public and private sectors for innovation and widespread deployment efforts(European Commission 2023b).12 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Table 2:Average produ

164、ction costs of green hydrogen by renewable electricity sources Unit 2023 2030 Optimistic Reference Pessimistic Optimistic Reference Pessimistic Efficiency%69 66 65 71 69 66 Nominal Power MW 220 140 100 750 425 100 Specific power cost$/MWh 338,000 949,000 1,145,000 289,000 623,000 750,000 Lifetime ye

165、ar 25 22 20 30 23 20 Annual CAPEX$,y 5,382,278 10,278,291 9,344,225 14,422,974 20,001,281 6,120,671 OPEX factor%2 3,66 9 2 3.2 5 Annual fixed OPEX$,y 1,487,200 4,871,533 10,305,000 4,335,000 8,472,800 3,750,000 Electricity demand MWh,y 1,760,000 620,620 230,000 6,000,000 1,884,025 230,000 LCOE$/MWh

166、41 41 41 20 24.75 27 Annual electricity costs$,y 72,160,000 25,445,420 9,430,000 120,000,000 46,629,619 6,210,000 Water costs per kWh H2 output$/kg 0.0001151 0.0001598 0.0002147 0.0000890 0.0001292 0.0001952 Annual H2O costs$,y 139,802 65,656 32,101 379,076 167,970 29,633 Total annual OPEX$,y 73,787

167、,002 30,382,609 19,767,101 124,714,076 55,270,389 9,989,633 Total annual costs,y 79,169,280 40,660,900 29,111,325 139,137,049.76 75,271,670 16,110,305 Costs pro kg H2$/kg 2.17 3.30 6.4 1.09 1,93 3.53 Sources:(Matthes et al.2020),(Grahn et al.2022),(Mendelevitch et al.2023),(Wilms et al.2018),(Hank e

168、t al.2023),(Marchese et al.2021),(Lvenich et al.2018)2050 Vision:Anticipating the economic landscape of e-diesel In the 2050 findings,more favorable outcomes are revealed,showcasing a spectrum of total production costs for one kg of e-diesel between$0.79 and$1.61 for the optimistic scenario,$1.59 an

169、d$2.39 for the reference scenario,and$3.15 and$4.75 for the pessimistic scenario.These reductions are primarily attributed to the same factors observed in the 2030 scenario,where both hydrogen electrolysis and Direct Air Capture experience efficiency enhancements and decreased investment costs.Addit

170、ionally,the continued decline in the Levelized Cost of Electricity significantly impacts overall costs.13 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Figure 5:Cost Breakdow

171、n for e-diesel production in$/kg(H2)Chile Patagonia-2050 Source:Authors own calculation and illustration.Within the optimistic scenario unfolding in Chiles Patagonia,identified as the most promising,the production costs dipping below$0.80 per kilogram of e-diesel underscore the significance of hydro

172、gen,even amid higher efficiencies and more favourable conditions(see Figure 5).Indeed,hydrogen emerges as the most substantial cost component(85.13%),highlighting its pivotal role in the e-diesel production process even in the optimistic scenario,which foresees an exceptionally low hydrogen cost,ind

173、icative of heightened efficiency and access to competitive renewable electricity.The scenario envisions a moderate electricity cost of$0.012 per kilogram of e-diesel,implying the accessibility to cost-effective renewable energy sources.Carbon dioxide costs are notably low at$0.075 per kilogram of e-

174、diesel,with capturing costs at$34.42 per ton of CO2.This underscores the strategic importance of promptly considering carbon capture as an offset strategy,enabling the realization of learning effects in the near future and the sustainable and efficient mitigation of CO2 emissions.Significantly,inves

175、tment costs for FT-plants stand at$0.029 per kilogram of e-diesel,indicating highly favorable conditions and consequently resulting in exceedingly low fixed operating costs at$0.001 per kilogram of e-diesel.Hydrogen storage costs prove negligible in all scenarios,indicating the effectiveness and cos

176、t-effectiveness of storage solutions.In summary,the optimistic scenario portrays a cost-effective and efficient e-diesel production process characterized by minimal investment,operating,and environmental mitigation costs.The judicious management of hydrogen,a key component,further augments the overa

177、ll competitiveness of e-diesel production in Chiles Patagonia and in the other regions in the year 2050.Figure 6 provides an alternative perspective on the cost breakdown for e-diesel production,integrating hydrogen production,Direct Air Capture,and Fischer Tropsch costs individually.The alkaline el

178、ectrolyser,operating at 82%efficiency,emerges as the primary consumer of electricity with over 68%.Considering the utilization of excess heat from the Fischer Tropsch plant,there is potential to boost overall plant efficiency by up to 9%,leading to a hydrogen electrolysis efficiency of 93%and a redu

179、ction in production costs to$0.446 per kilogram of green hydrogen and$0.71 per kilogram of e-diesel.14 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Figure 6:Cost breakdown f

180、or e-diesel production in%in Chile Patagonia,2050 alternative perspective Source:Authors own calculation and illustration.Exploring the potential utilization of excess heat generated by the Fischer Tropsch plant to power the overall system could enhance overall plant efficiency by up to 9%(Fasihi et

181、 al.2016).This improvement results in a hydrogen electrolysis efficiency of 93%,potentially leading to a reduction in electricity demand and consequently lowering production costs to$0.446 per kilogram of green hydrogen and$0.71 per kilogram of e-diesel.The second-highest cost component,representing

182、 over 13%of the total costs,is also hydrogen,with its investment costs.Direct Air Capture(DAC)holds the third position,accounting for 5.60%of the total costs.3.4 Comparative assessment of the results This analysis embarks on a comparative exploration of the potential trajectories for e-diesel within

183、 the context of maritime transport.Three key comparisons are undertaken to delineate its cost competitiveness,validity,and broader positioning among renewable alternatives.The first comparison involves juxtaposing the model results with the anticipated marine diesel prices for 2023,2030,and 2050.The

184、 aim of this analysis is to determine the cost competitiveness of e-diesel and the feasibility of its market introduction by identifying potential market entry points over time.Considering the 13-year sustainable average ratio,where the cost of one barrel of diesel(consisting of crude oil consumptio

185、n and refining costs)is equal to 118.76%of the price of marine diesel(Fasihi et al.2016),the costs for marine diesel are estimated based on the crude oil projections provided by the U.S Energy Information Administration(EIA)(EIA 2023).Accordingly,the costs for 2023 are established at 0.76$/kg(e-dies

186、el)and the projected costs are set at 0.73$/kg(e-diesel)for 2030 and 0.80$/kg(e-diesel)for 2050.The comparison between the costs of producing one kilogram of e-diesel in Chiles Patagonia,expected to have the lowest production costs in the long term according to the model calculations,with convention

187、al marine diesel,is illustrated in Figure 7 below.Even under the optimistic scenario,the price of e-diesel is projected to be 3.5 times higher in 2023 compared to the current costs,with even less favorable figures for the reference scenario(7.23 times higher)and the pessimistic scenario(15.9 times h

188、igher).Despite relevant cost decreases projected for 2030,the production of e-diesel remains uncompetitive against conventional marine diesel in all scenarios,with a 2.34 times higher cost for the optimistic scenario,4 times higher for the reference scenario,and almost 8 times higher for the pessimi

189、stic scenario.By 2050,the costs for e-diesel align with the price of conventional marine diesel 0.00%3.63%13.24%5.60%0.13%3.61%0.22%1.50%68.11%3.01%0.55%0.39%Hydrogen storage costsCAPEX FTCAPEX hydrogenCAPEX DACfixed OPEX FTfixed OPEX hydrogenfixed OPEX DACElectricity costs FTElectricity costs hydro

190、genElectricity costs DACHeat costs DACTotal water costs 15 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.in the optimistic scenario,are almost 2 times higher for the referenc

191、e scenario,and 4.4 times higher for the pessimistic scenario.Figure 7:Cost comparison of e-diesel production costs in Chile,Patagonia with conventional marine diesel Source:Authors own calculation and illustration.Identifying the primary drivers of cost reduction and analyzing scenario variances is

192、therefore instrumental in discerning controllable factors that can mitigate costs.However,the nascent stage of technology indicates that major cost reductions are not anticipated in the near future.Therefore,government intervention becomes imperative,exemplified by the need for carbon taxes on conve

193、ntional fuels to level the playing field and make e-diesel competitive.The second comparison,illustrated in Figure 8,entails aligning the model results with findings for 2030 and 2050 from other studies on e-diesel,serving as a litmus test to assess the relative validity and robustness of the model

194、estimations(Grahn et al.2022).This test aims to validate the credibility of the model against existing research in the field.The analysis of studies on current and future expected costs to produce e-diesel reveals a significant variation in projected costs based on assumed factors such as the plant

195、location,WACC,renewable electricity costs,or plant efficiency.On average,production costs of approximately 3.47$/kg(e-diesel)are 16 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Memb

196、ers.calculated until 2030.Particularly low costs are reported in studies that assume highly cost-effective power sources with high full load hours,such as hydropower combined with CO2 from point sources (Neuling and Berks 2023).However,the available potential for both is very limited,rendering them

197、unsuitable for mass e-fuel production.Moderate costs arise from a combination of affordable electricity with high full load hours and an expensive CO2 source like DAC or lower capacity hours in electricity generation (Neuling and Berks 2023).Figure 8:Benchmarking estimates:Validating e-diesel model

198、results through literature review Source:Authors own illustration.*This source examines the production costs of e-diesel in the Middle East and North Africa(MENA)region,as well as in European regions known for their low renewable electricity costs,such as Spain(solar photovoltaic)and Ireland(wind).T

199、he study considers various scenarios,including an optimistic one characterized by the most favorable economic conditions(e.g.,lowest capital expenditure,lowest levelized cost of electricity)and a worst-case scenario reflecting the least favorable economic conditions(Grahn et al.2022).*This source co

200、nducts a detailed analysis of the production costs associated with PtX(Power-to-X)products,such as e-diesel,focusing on North Africa as well as other regions.It employs a comprehensive model to calculate costs across various production stages,incorporating estimates for renewable energy costs as wel

201、l(Andrea et al.2018).3.991.500.921.291.632.003.153.513.674.751.591.672.012.390.920.801.191.610.000.501.001.502.002.503.003.504.004.505.001E-diesel costs in$/kgMENA regions,worst case scenario,2050*MENA regions,best case scenario,2050*North Africa,Optimistic-2050*North Africa,Average-2050*North Afric

202、a,Pessimistic-2050*Regions with good conditions forrenewable electricity,such as Irelandand western Spain-2050*e-diesel Chile(PV)-Pessimisticscenario-2050e-diesel Chile(W)-Pessimistic scenario-2050e-diesel Australia(PV)-Pessimisticscenario-2050e-diesel US(Wind)-Pessimisticscenario-2050e-diesel Chile

203、(PV)-Reference scenario-2050e-diesel Chile(W)-Reference scenario-2050e-diesel Australia(PV)-Referencescenario-2050e-diesel US(Wind)-Reference scenario-2050e-diesel Chile(PV)-Optimistic scenario-2050e-diesel Chile(W)-Optimistic scenario-2050e-diesel Australia(PV)-Optimisticscenario-2050 17 The conten

204、ts of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.The average production cost for regions with very low renewable energy costs is projected to be 2.01$/kg(e-diesel)in 2030,as indicated by

205、various sources 2030(1):(Fasihi et al.2016);(2):(Grahn et al.2022);(3):(Andrea et al.2018),in comparison with the 1.74$/kg(e-diesel)average for the optimistic scenario in this studys model.Looking ahead to 2050,literature with conditions similar to those in this study presents production costs rangi

206、ng from 0.92$/kg(e-diesel)(MENA regions,worst-case scenario,(Grahn et al.2022)to 3.99$/kg(e-diesel),(North Africa,average scenario,(Andrea et al.2018)(see Figure 8).The final comparison extends to evaluating the model results against alternative renewable fuels for the shipping sector,drawing on cos

207、t data sourced from pertinent literature.This comparative analysis aims to contextualize the competitiveness of e-diesel within the broader landscape of renewable fuels for maritime transport.In Figure 9,production costs for various biofuels and e-fuels,calculated as averages from different sources,

208、are presented and compared with the results of the models optimistic and reference scenarios (Grahn et al.2022;Kopp et al.2017).Near-term production costs fall within the range of approximately 1.52$/kg(e-diesel),with the lowest cost being 1.15$/kg(e-diesel)for liquefied bio-methane produced with el

209、ectricity from biogas,and the highest at 2.3$/kg for e-kerosene through the methanol-to-jet process.The estimated costs for e-diesel production in the model are the highest,remaining uncompetitive even with other renewable alternatives for marine diesel until 2030.Figure 9:Production costs for renew

210、able fuels in 2030 and 2050 Source:Authors own illustration.Figure 9 also illustrates that bio-e-fuels have lower production costs than their e-fuel counterparts.Although hydrogen is employed in producing all types of e-fuels it is noteworthy that the costs for hydrogen are not necessarily lower tha

211、n those for e-fuels and bio-e-fuels when considering costs for liquefaction or compression.All analysed fuel options have the potential for production costs between 0.98$/kg and 1.65$/kg in the long term.Consequently,all renewable fuels maintain higher costs than e-diesel for the optimistic scenario

212、 in Chiles Patagonia(0.79$/kg(e-diesel),).In the short-and long-term all e-fuels,except e-diesel,exhibit higher production costs than fossil diesel assuming an oil price of 0.73$/kg for 2030 and 0.80$/kg for 2050.00.511.522.533.54Liquefied bio-electro-methane(from biogas)Compressed hydrogenBio-elect

213、ro-methanolLiquefied bio-electro-methane(from syngas)Liquefied hydrogenElectro-ammoniaBio-electro-gasolineElectro-methanolLiquefied electro-methaneBio-electro-keroseneElectro-gasolineElectro-kerosenee-diesel Chile(PV)-Reference scenarioe-diesel Chile(W)-Reference scenarioe-diesel Australia(PV)-Refer

214、ence scenarioe-diesel US(Wind)-Reference scenarioe-diesel Chile(PV)-Optimistic scenarioe-diesel Chile(W)-Optimistic scenarioe-diesel Australia(PV)-Optimistic scenarioe-diesel US(Wind)-Optimistic scenarioCosts in$/kg20502030 18 The contents of this paper are the authors sole responsibility.They do no

215、t necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.4.Sensitivity assessment This section delves into a sensitivity analysis to further elucidate the robustness of the findings and identify key drivers impacting the economic efficiency of e-diesel produ

216、ction.4.1 WACC The first analyzed sensitivity analysis pertains to the adjustment of the Weighted Average Cost of Capital(WACC),a comprehensive measure encompassing a companys average after-tax cost of capital from diverse sources,including ordinary shares,preference shares,bonds,and other forms of

217、debt.Essentially,the WACC reflects the average interest rate that a company is likely to have to pay to finance its business activities(Folger 2022).In this case,the impacts of adjusting the WACC within the range of 5%to 15%for the four studied regions are investigated.The sensitivity analysis resul

218、ts,presented in figure 10,outline the impact on the production costs of e-diesel for the years 2023,2030,and 2050 across the different scenarios(Optimistic,Reference,Pessimistic).A consistent trend is observed,whereby higher production costs are associated with higher WACC values,highlighting the se

219、nsitivity of costs to changes in the cost of capital.In the optimistic scenario,lower WACC percentages are correlated with decreased production costs,while significantly higher costs are evident in the pessimistic scenario with higher WACC values.Figure 10:Variation of e-diesel production costs in C

220、hile,Patagonia for different WACC Source:Authors own calculation and illustration.These findings underscore the pivotal role played by the WACC in determining the economic viability and competitiveness of e-diesel production.The necessity for meticulous consideration of capital costs in future plann

221、ing and decision-making is emphasized by these insights.While the WACC is not directly controlled by the government,its economic policy and regulatory decisions can have a significant indirect impact on the factors contributing to the WACC for companies operating within a specific jurisdiction.Varia

222、bles such as interest rates,regulations,and tax policies can be influenced,highlighting the interconnected nature of economic policies and the e-diesel production landscape.0.002.004.006.008.0010.0012.0014.0016.0018.005.00%6.00%7.00%8.00%9.00%10.00%11.00%12.00%13.00%14.00%15.00%E-diesel costs in$/kg

223、WACC2023 Optimistic2023 Reference2023 Pessimistic2030 Optimistic2030 Reference2030 Pessimistic2050 Optimistic2050 Reference2050 Pessimistic 19 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any

224、of its Members.4.2 CO2 Prices The second presented sensitivity analysis revolves around the implementation of a carbon dioxide price on conventional marine diesel.As highlighted earlier,the primary motivation for integrating liquid e-fuels into the shipping sector lies in sustainability goals,aiming

225、 to reduce greenhouse gas(GHG)emissions and achieve carbon neutrality by 2050.To leverage this goal,it is essential to recognize that the current use of conventional marine diesel is environmentally harmful,and introducing a carbon price can potentially increase its costs.Traditional diesel,currentl

226、y in use,generates approximately 20.2 tons of carbon per terajoule(t(C)/TJ),equivalent to 74.02 tons of CO2 per terajoule(t(CO2)/TJ).This translates to approximately 3.2 kg of CO2 per kg of diesel(kg(CO2)/kg(D)(Fasihi et al.2016).The introduction of a carbon tax emerges as a pivotal factor that can

227、significantly impact the competitive landscape between conventional and e-diesel.To explore this impact,the model systematically escalates the carbon tax from 0 to 2000$/t(CO2),aiming to identify the threshold price at which e-diesel becomes competitive across the three scenarios.In the short term(S

228、ee Figure 11),particularly within both reference and pessimistic scenarios,it becomes evident that significantly elevated carbon prices are imperative,reaching figures of 618.75$/t(CO2)and 1700$/t(CO2),respectively.For the optimistic scenario,a minimum carbon price of 200$/t(CO2)until 2030 is identi

229、fied as necessary to ensure its economic viability.Figure 11:Marine diesel price with increasing CO2 tax-2030 Source:Authors own calculation and illustration.Examining the current global carbon pricing landscape reflects the challenges of imposing such higher carbon prices,especially in the pessimis

230、tic scenario.Indeed,Uruguay currently holds the highest global carbon tax at an initial rate of 137$/t(CO2).In Europe,Sweden leads with a carbon tax rate of 129.89$/t(CO2),followed by Switzerland and Liechtenstein(World Resources Institute 2021).Based on estimated carbon pricing for the EU ETS accor

231、ding to Statista for the years 2024 and 2025,the projected costs for CO2 until 2050 may show an exceptional increase.However,this may be considered a very optimistic approach.The graph below(Figure 12)indicates that the costs for e-diesel remain uncompetitive until 2034,even in the optimistic scenar

232、io,with a necessary carbon price of approximately 230$/t(CO2).For the reference scenario,a breakeven point is expected in 2040 for a carbon price of approximately 456$/t(CO2),and the pessimistic scenario remains uncompetitive until 2047,reaching a carbon price of more than 900$/t(CO2).0.731.372.816.

233、05003003504004505005506006507007508008509009500000000Price in$/kgCO2tax in$/t 20 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford

234、 Institute for Energy Studies or any of its Members.Figure 12:Marine diesel price with increasing CO2 tax versus e-diesel production costs in Chile Patagonia Source:Authors own calculation and illustration.A more comprehensive strategy could involve incorporating financial support for saved CO2.If e

235、-diesel is produced from renewable energy,approximately 3.2 kg of CO2 is mitigated for every 1.0 kg of e-diesel produced.For instance,at a CO2 credit of 150$/t(CO2),costs are 0.48$/t(CO2)lower compared to the base case with no carbon price.This underscores the potential effectiveness of combining ca

236、rbon pricing with financial incentives for carbon reduction in optimizing the economic viability of e-diesel production.4.3 Multifaceted sensitivity assessment:Analysing the collective impact of various elements As it has been shown,the viability of e-diesel in the shipping industry is influenced by

237、 various determinants.Consequently,the consideration of multiple elements becomes imperative to enhance its potential.One crucial aspect identified in the prior analysis is the breakdown of e-diesel costs,with approximately 70%being allocated to electricity needed for the hydrogen production through

238、 electrolysis.Thus,improving the efficiency of electrolysis can be a key strategy for potential cost reduction.For this purpose,the efficiency of the electrolysis process(AEL)is increased from 66%,the lowest efficiency reported for 2030 in the literature,to 76%.Simultaneously,the WACC is varied acro

239、ss values of 5%,7%,and 9%,while considering the potential of selling O2 for 20$/t(O2)and 50$/t(O2).To assess the competitiveness of e-diesel,estimated prices for marine diesel were incorporated,factoring in an increasing CO2 price ranging from 0 to 400$/t(O2)in the Figure 13 below.The results,based

240、on a nominal power of 750 MW for AEL with full load hours of 8000(h/a)and an 80%efficiency for the Fischer Tropsch plant,as well as a nominal power of approximately 180 MW with full load hours of 8000(h/a),demonstrate that a combination of the considered factors(WACC reduction,O2 price of 50$/t(O2),

241、and increased AEL efficiency to 76%)can decrease the required carbon price in 2030 from around 360$/t(O2)to 260$/t(O2).However,its important to note that this optimistic price projection contrasts with expected EU ETS prices of around 75.6-81$/t(O2)(EIA 2023).Implementing such a carbon price globall

242、y,especially in Europe,might pose challenges given current market 02468101214Price/cost in$/kgYear,Carbon price(CP)Conventionel diesel pricee-diesel(Ch,P-Op)e-diesel(Ch,P-Av)e-diesel(Ch,P-Pe)21 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views

243、 of the Oxford Institute for Energy Studies or any of its Members.conditions showing variable carbon prices from less than 10$/t(O2)(Ukraine,Estonia.)to more than 120$/t(O2)(Liechtenstein).Additionally,considering the international nature of the shipping sector,efficient measurements are more likely

244、 to be conducted on an international scale rather than on a localized basis in specific countries.Figure 13:Comparison of e-diesel and conventional marine diesel prices in$/kg in Chilean Patagonia-2030 Optimistic scenario:Exploring varied efficiencies and considerations Source:Authors own calculatio

245、n and illustration.To summarize,the economic analysis of e-diesel production highlights the challenges and opportunities associated with this nascent technology.While potential cost reductions can be expected through efficiency gains and learning effects,the current high production costs combined wi

246、th external factors favoring conventional marine diesel,pose significant hurdles.Notably,crucial catalysts for reshaping the economic landscape of e-fuels emerge in the form of external interventions,such as policy incentives and carbon taxes.0.811.21.41.61.822.266%67%68%69%70%71%72%73%74%75%76%Cost

247、/price in$/kgAEL efficiencywithout selling O2with selling O2(20$/t)with selling O2(50$/t)without selling O2with selling O2(20$/t)with selling O2(50$/t)without selling O2with selling O2(20$/t)with selling O2(50$/t)No Carbon Tax$100/ton Carbon Tax$200/ton Carbon Tax$300/ton Carbon Tax$400/ton Carbon T

248、ax 22 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Conclusion E-fuels,in particular e-diesel,will have to play a key role in replacing fossil fuels in shipping and thus prom

249、ote climate change mitigation in this sector.However,at present,it remains uncertain whether e-diesel will indeed be utilized in the coming years,further adding to the challenge of predicting its availability and usage(Foreticha et al.2021).Challenges such as inefficiency,high costs,and the absence

250、of a clear policy framework impede its widespread adoption(Neuling and Berks 2023).This research work explores the sustainability of e-diesel for the shipping sector,examining factors beyond CO2 emissions,such as electricity requirements,carbon dioxide sourcing,resource utilization,and socio-economi

251、c impacts.It emphasizes the need for renewable energy sources,closed carbon cycles,and consideration of local demands to ensure the sustainability of e-diesel in mitigating the shipping industrys environmental footprint.However,many challenges,such as high land requirements,water scarcity and socio-

252、economic considerations,underscore the complexity of transitioning to liquid e-fuels and the need for careful evaluation and international standards.When focusing on countries characterized by the lowest and most competitive costs of photovoltaic(PV)and wind power plants worldwide,the estimated cost

253、s to produce e-diesel vary across the identified regions and over time,with the LCOE playing a crucial role.The model developed in this paper underscores the persistently high costs of e-diesel,with projected reductions until 2030 deemed insufficient.Factors such as lower LCOE,technological advancem

254、ents,and economies of scale are anticipated to contribute to cost reductions,albeit not to a significant extent.Until 2050,costs are projected to remain relatively high,particularly in the pessimistic scenario,while the optimistic scenario presents more favorable outcomes.Despite the current high pr

255、oduction costs and competition from conventional marine diesel,potential catalysts for change,such as policy incentives,present opportunities to reshape the economic landscape of e-diesel.The overall findings emphasize the necessity of government intervention to ensure the economic viability of e-di

256、esel production,advocating for prompt action to support its successful market entry.However,the current regulatory framework for e-fuels in shipping faces numerous challenges,including uncertainty,inadequacy,and a lack of international coordination(Foreticha et al.2021).Public skepticism and politic

257、al obstacles in developing countries further complicate the regulatory landscape (Neuling and Berks 2023).It is essential to recognize that the political role and governmental responsibilities in the shipping sector are intricate,given its international scope.Policy adjustments in this sector carry

258、not only direct but also indirect global repercussions,underscoring the formidable challenge posed by the complexity involved(Foreticha et al.2021).Acknowledging and addressing these challenges are crucial steps towards fostering a supportive environment for the transition to sustainable marine fuel

259、s.23 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Appendix A.1:Model and formula The total costs for the production of e-diesel are estimated using the annuity method.The an

260、nuity factor is calculated using formula(1):=1(1(1+)(0)With:a=number of periods WACC=Weighted Average Cost of Capital.For each technology,the total investment costs should be divided by the annuity factor to obtain the investment costs per year.The technology is assessed by analyzing the cost per ki

261、logram of e-diesel produced.i.Water desalination costs The costs linked to seawater desalination plants are determined in dollars per kilowatt-hour(kWh)of hydrogen produced.The formulation(1)for these costs is expressed as follows:,(2)=(2)+(2)+,(2)(1)The total annual costs comprise the summation of

262、annual Capital Expenditure(2),annual fixed operating Expenditure(2)and variable Operating Expenditure which encompasses electricity costs(,(2).The fixed operating costs(2)are presumed to constitute a fixed percentage of the annual investment costs.(2)=(2)(2)The electricity costs(,(2)(3)of the plants

263、,are determined by multiplying the annual electricity demand(3)by the Levelized Cost of Electricity($).The annual electricity demand()is calculated by multiplying the electricity demand per cubic meter of water(3)and the annual water consumption(3)in cubic meters per year.The annual water consumptio

264、n(3)is equivalent to the desalinated water amount per output unit(32()multiplied by the annual production of hydrogen in kilowatt-hours per year(2().,=(3)=(4)=(5)ii.Hydrogen costs The calculation of the cost of one kilowatt-hour(kWh)of hydrogen(2)involves dividing the total annual production costs o

265、f hydrogen(2$.1)by the quantity of hydrogen produced in kilograms per year(2).This result is then multiplied by the caloric value of hydrogen(2),set at 33.33.1:24 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for En

266、ergy Studies or any of its Members.2=22 2(6)The formula for the annual hydrogen production equals the summation of investment costs(2,$),fixed operating costs(.2,$),electricity costs(2,$)and water costs(2,$).It is expressed as follows:2=2+.2+2+2(7)The annual CAPEX(2)are calculated by multiplying the

267、 nominal capacity power of the plant(,)by the specific power costs(,$),and subsequently utilizing the annuity method.2=1(1+)(8)The fixed operating costs(.2)are assumed to represent a fixed percentage of the annual investment costs,with a variable rate depending on the scenario ranging from 2%to 9%wi

268、th a relevant decrease over time.2=2(9)The calculation of the electricity costs(2)involves multiplying the full load hours(,)by the nominal power(,)and by the LCOE expressed in$:2=(10)The water costs(2)are derived straightforwardly from the desalinated water costs per kilowatt-hour of hydrogen outpu

269、t,multiplied by the quantity of hydrogen produced per year(2,):2=,(2)2 (11)The annual quantity of hydrogen produced(2)is contingent upon the efficiency of the plant(,%),the full load hours(,),the nominal power of the plant(,)and the number of electrolyzers in operation().2=1000 (12)The efficiency of

270、 the plant(,%),the full load hours(,)as well as the nominal power of the plant(,)are scenario-dependent,exhibiting notable advancements over time and contributing to the reduction of costs.iii.Direct air capture costs The aggregate costs of capturing one ton of CO2(2,$2)involve the summation of the

271、CAPEX costs(2,$2),fixed operating costs(2,$2),electricity costs(,2,$2),heat costs(,2,$2),and water costs(,2,$2)per ton of CO2 captured.2=2+2+,2+,2+,2(13)25 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy St

272、udies or any of its Members.The fixed operating costs(2)are assumed to represent a fixed percentage of the annual investment costs,with a variable rate depending on the year decreasing from 6%to 4%until 2050.2=(14)The electricity costs(,2)are determined by multiplying the electricity consumption per

273、 ton of CO2 produced(,2)with the:,2=(15)The heat costs(,2(16)are computed by utilizing the with a conversion efficiency of 90%from electricity to heat and a conversion ratio of 3.6 from GJ to kWh,taking into account the heat consumption of the plant per ton of CO2 produced(,2):,2=0.93.6(16)The water

274、 costs(,2,(17)are determined by multiplying the water consumption per ton of CO2(,2.21)with the water costs per ton(,$2):,2=(17)iv.E-diesel production costs The costs per kg e-diesel produced(,$(18)are determined by dividing the total yearly costs(,$)by the total quantity of e-diesel produced per ye

275、ar(_,),and can be expressed as follows:=(18)The percentage(%)represents the highest proportion of e-diesel in the end product reported in the literature Mah16.Consequently,the yearly quantity of e-diesel produced()is determined by multiplying the factor()with the total output of the fuel synthesis(_

276、,).The overall output of the fuel synthesis(_)is contingent upon the efficiency of the Fischer-Tropsch process(,%),the total load hours of the plant(,),the nominal power of the plant(,),the caloric value of e-diesel(,)and the number of plants in operation().=_(19)_=(20)The total yearly costs(,$)are

277、the sum of the total CAPEX(,$),the annual fixed operating costs(,$),the annual electricity costs(,$),the annual hydrogen costs(2,$),the annual carbon dioxide costs(2,$)and the annual hydrogen storage costs(2,$):=,+,+,+2+2+2,(21)26 The contents of this paper are the authors sole responsibility.They d

278、o not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.,=,(22)The electricity costs(,)are calculated by multiplying the annual electricity demand(,),derived from the required amount of electricity per ton of Fischer-Tropsch(FT)output and assumed to be

279、constant as per literature,with the.,=(23)The annual hydrogen costs(2)depend on the hydrogen production costs(2,$2)and the quantity of hydrogen required per kg of output(,).This is therefore influenced by the efficiency(,%)of the FT plant.2=2(24)The annual carbon dioxide costs(2)are determined by mu

280、ltiplying the total output of e-fuel synthesis(,)with the carbon dioxide demand per kilogram of output produced(2,2),and the carbon costs per kilogram of carbon dioxide(2,$2).2=_22(25)The annual stored quantity of hydrogen is calculated as the difference between the quantity of hydrogen produced(,2.

281、1)and the amount required for the FT process with considering the remaining quantity of stored hydrogen from the previous years(2,).2,=(2+)(26)With:=costs for storing one kg of hydrogen.27 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of t

282、he Oxford Institute for Energy Studies or any of its Members.Appendix A.2 Table A.2:Selected worldwide PtX projects Project name Location Products Quantities in tons/y Concerned sectors Year Arcadia e-fuels Copenhagen eKerosene and e-Diesel 75000 Shipping and aviation 2025 Bilbao Decarbonization Hub

283、 Spain E-fuels via FT 2337.5 2024 FlagshipONE Sweden eMethanol 50,000 Shipping sector 2023 INERATEC Pioneer Plant Germany Liquid e-fuels 3910 Aviation 2024 ReuZe Project France eKerosine and e-Diesel More than 100,000 Shipping and Aviation 2026 Atmosfair Fairfuel Germany eKerosene 350 Aviation 2022

284、CAC Synfuel Plant Germany eGasoline und eKerosene 850 2030 Infinium Electrofuels Corpus Facility United states eKerosene and e-Diesel 11465 Shipping and Aviation 2023 Nordic Electrofuel-Plant 1 Norway eKerosene 2025:3.47,2026:8.93 Aviation 2024 Synhelion Solar Fuels Germany eKerosene,eGasoline,and e

285、-Diesel 10000 Synhelion Solar Fuels Bell Bay Powerfuels Project Tasmania,Australia eMethanol 70.000 2024 Demonstration Plant Haru Oni Chile e-Methanol,e-gasoline 440.5 eGasoline and 350 eMethanol 2023 HIF Matagorda United States Green Hydrogen 300,000 2027 Norsk e-Fuel Alpha Norway FT liquid e-fuels

286、 2024:10.63 2026:21.25 2024 Synhelion Solar Fuels Spain Spain eKerosene,eGasoline,and e-Diesel 425 Synhelion Solar Fuels Spain 28 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Member

287、s.References Acceleron(2023)Shipping reliant on e-fuels for climate-neutral future(Baden,Switzerland),.Andrea,L.,Michaela,U.and Jens,P.(2018)PtG/PtL Rechner,.Ausfelder,F.and Dura,H.E.(2018)Optionen fr ein nachhaltiges Energiesystem mit Power-to-X Technologien:Herausforderungen Potenziale Methoden Au

288、swirkungen,.Bellini,E.(2019)IRENA predicts LCOE of solar will drop to$0.01-0.05 by mid century,.Berkeley Lab(2021)Are We Underestimating the Potential for Wind Energy Cost Reductionsand also the Uncertainty?,.Beverly,A.,Brown,N.and Rios,C.(2022)Alternative fuels outlook for shipping.An overview of a

289、lternative fuels from a well-to-wake perspective.Breyer,C.(2018)Complementarity of Hydro,Solar and Wind as Basis for 100%Renewables in Latin America,.Bullmann,T.,Gollnick,C.and Schorpp,J.(2020)Wasserstoff,DIHK Faktenpapier,.Carroll,D.(2023)ARENA pushes for step change in solar cost and efficiency,.C

290、Binsights(2021)Direct Air Capture Explained:The Buzzy New Carbon Reduction Tech Gaining Exec Attention,.Csiro(2022)GenCost 2022-23,.Djunisic,S.(2022)LatAm solar LCOE seen to drop to USD 14/MWh by 2050,says WoodMac,.EIA(2023)Annual energy outlook 2023,.European Commission(2023a)Fourth Annual Report f

291、rom the European Commission on CO2 Emissions from Maritime Transport(period 2018-2021),.(2023b)Reducing emissions from the shipping sector,.Fasihi,M.,Bogdanov,D.and Breyer,C.(2016)Techno-Economic Assessment of Power-to-Liquids(PtL)Fuels Production and Global Trading Based on Hybrid PV-Wind Power Pla

292、nts,99.Folger,J.(2022)Interest Rates and Other Factors that Affect WACC,.Foreticha,A.,Zaimes,G.,Hawkins,T.and Newes,E.(2021)Challenges and opportunities for alternative fuels in the maritime sector,2.Grahn,M.,Malmgren,E.,Korberg,A.and Taljegard,M.et al.(2022)Review of electrofuel feasibilitycost and

293、 environmental impact,4.29 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Guel,T.(2022)Direct Air Capture A key technology for net zero,.Hank,C.,Holst,M.,Thelen,C.and Kost,C.e

294、t al.(2023)Site-specific,comparative analysis for suitable Power-to-X pathways and products in developing and emerging countries,.Heuser,P.-M.(2020)Weltweite Infrastruktur zur Wasserstoffbereitstellung auf Basis erneuerbarer Energien,532.Hydrogen Central(2021)Lessons from Chile,the spearhead in the

295、hydrogen revolution,.iea(2023)Snapshot of Global PV Markets 2023,.IRENA(2023)Renewable power generations costs in 2022,.Kasten,P.(2020)E-Fuels im Verkehrssektor,.King,A.(2022)Emissions-free sailing is full steam ahead for ocean-going shipping.Kitchen,C.(2022)CSIRO does the maths:RE+Integration,.Kopp

296、,M.,Coleman,D.,Stiller,C.and Scheffer,K.et al.(2017)Energiepark Mainz:Technical and economic analysis of the worldwide largest Power-to-Gas plant with PEM electrolysis,42.Kramer,S.and Jones,C.(2020)Environmental Permitting and Compliance Cost Reduction Strategies for the MHK Industry:Lessons Learned

297、 from Other Industries,.Lindstad,E.,Lagemann,B.,Rialland,A.and M.Gamlem,G.et al.(2021)Reduction of maritime GHG emissions and the potential role of E-fuels,101.Litvak,S.and Litvak,O.(2020)Some Aspects of Reducing Greenhouse Gas Emissions by Using Biofuels.Lvenich,A.,Unteutsch,M.and Perner,J.(2018)Be

298、rechnungsmodell zur Ermittlung der Kosten von Power-to-Gas(Methan)und Power-to-Liquid,.Mahler,A.(2021)Sustainably sourcing CO2 for Power-to-X,.Marchese,M.,Chesta,S.,Santarelli,M.and Lanzini,A.(2021)Techno-economic feasibility of a biomass-to-X plant:Fischer-Tropsch wax synthesis from digestate gasif

299、ication,228.Matthes,F.C.,Heinemann,C.,Hesse,T.and Kasten,P.et al.(2020)Wasserstoff und wasserstoffbasierte Energietrger bzw.Rohstoffe,.Mayer,J.N.(2015)Current and Future Cost of Photovoltaics(Freiburg,Germany),.McGill,R.,Remley,W.and Winther,K.(2013)Alternative Fuels for Marine Applications,.McKeown

300、,H.(2024)CATAGEN Leads Consortium that wins Clean Maritime Demonstrator Competition for Decarbonisation,.30 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members.Medrano-Garca,J.,Cha

301、ralambous,M.and Guilln-Goslbez,G.(2022)Economic and Environmental Barriers of CO2Based FischerTropsch Electro-Diesel.Mendelevitch,R.,Heinemann,C.,Krieger,S.and Dnzen,K.et al.(2023)PTX Business Opportunity Analyser(BOA):Data Documentation,.Moser,A.(2020)EVS 2:IAEW.Neuling,U.and Berks,L.(2023)E-Fuels

302、zwischen Wunsch und Wirklichkeit.OffshoreWind.biz(2021)Offshore Wind Costs in 2050 Could Be Lower than Previously Expected,.Perner,J.,Unteutsch,M.and Lvenich,A.(2018)The Future Cost of Electricity-Based Synthetic Fuels,.Pri,C.(2019)Decarbonization of the mobility sector:potential of Power-to-X techn

303、ologies.Pues,D.(2022)Direct Air Capture.Satymov,R.,Bogdanov,D.and Breyer,C.(2022)Global-local analysis of cost-optimal onshore wind turbine configurations considering wind classes and hub heights,256.Schimmel,M.(2022)Hydrogen Market state&trends.,.Smart city Korea(2021)Chile Green Hydrogen Market Tr

304、end.Statista(2023)Installed solar photovoltaic(PV)capacity in Chile from January 2020 to July 2023(in megawatts),.Tai,H.,Samandari,H.,Pacthod,D.and Polymeneas,E.et al.(2022)The energy transition:A region-by-region agenda for near-term action,.Tan,E.,Hawkins,T.,Lee,U.and Tao,L.et al.(2020)Techno-Econ

305、omic Analysis and Life Cycle Assessment of Greenhouse Gas and Criteria Air Pollutant Emissions for Biobased Marine Fuels,.Tan,E.and Tao,L.(2019)Economic Analysis of Renewable Fuels for Marine Propulsion,.Toscano,D.(2018)The Impact of Shipping on Air Quality in the Port Cities of the Mediterranean Ar

306、ea:A Review.Umwelt Bundesamt(2023)Emissionen des Verkehrs,.Webb,P.,Muslemani,H.,Fulton,M.and Curson,N.(2023)Scaling Direct Air Capture(DAC):A moonshot or the skys the limit?.OIES CM07 Wilms,S.,Lerm,V.,Schfer-Stradowsky,S.and Sandn,J.et al.(2018)Heutige Einsatzgebiete fr Power Fuels,.Wiser,R.and Boli

307、nger,M.(2022)Land-Based Wind Market Report:2022 Edition,.Wood Mackensie(2022)Solar PV to overtake onshore wind in Latin America from 2023.31 The contents of this paper are the authors sole responsibility.They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of

308、 its Members.World Resources Institute(2021)Direct Air Capture:Resource Considerations and Costs for Carbon Removal,.WorldData(2024)Belgium,.Zang,G.,Sun,P.,Elgowainy,A.and Bafana,A.et al.(2021)Life Cycle Analysis of Electrofuels:FischerTropsch Fuel Production from Hydrogen and Corn Ethanol Byproduct CO2.