Introduction to alternative fuels and financial and non-financial factors

1. Alternative Fuels for the transport sectors: advanced
biofuels & synthetic fuels
30 June 2023

2.  Biofuels and advanced biofuels
 1° generation: from food-based feedstock, predominantly
using crop plants to make biodiesel and bioethanol, such as
corn, sugarcane, wheat, and oilseeds (canola, soybean, palm)
 2° generation: from non-edible ligno-cellulosic materials as
agricultural byproducts like sugarcane bagasse and cellulosic
crop waste as well as non-crop plants
 3° generation: from marine macroalgae, seaweed, algal
biomass, and cyanobacteria
Alternative Fuels for the transport sectors:
advanced biofuels & synthetic fuels
 Synthetic Fuels:
 Also named e-fuels or “Renewable liquid and gaseous
transport fuels of non-biological origin” (RFNBO)
 Synthetic fuels are produced via green and renewable
energy and chemical processes (e.g. electrolysis +
Fischer-Tropsch synthesis).
Source: Fritsch, M., Puls, T., & Schaefer, T. (2021). IW-Expertise Synthetic fuels : potential for Europe. Instiut Der Deutschen Wirtschaft, March.

3.  Hydrogen
 Hydrogen is an energy carrier with multiple benefits and purposes that can be entirely produced
from carbon free and renewable energy sources
 hydrogen is not an energy source but an energy vector
 hydrogen acts as a fuel
 the combustion of hydrogen does not produce CO2 but only water
 it can act as an energy storage for renewable energy sources
Alternative Fuels for the transport
sectors: hydrogen

4. The European Strategy towards climate-
neutrality and hydrogen energy
 Biofuels and electrification: Short-term EU strategy to
decarbonize the transport sector
 Synthetic fuels: Short-medium term EU strategy
 Hydrogen: long-term EU strategy towards climate neutrality
 Phase 1 (2020-24):
 support and fund green hydrogen production
and deploy the grid infrastructure
 Phase 2 (2024-30):
 strategic objective to install at least 40 GW of
renewable hydrogen electrolysers by 2030.
 expansion into new sectors, including steel-
making, trucks, rail and maritime transport
 Phase 3 (2030 -2050):
 renewable hydrogen technologies should
reach maturity and be deployed at large
scale to reach all hard-to-decarbonize
sectors where other alternatives might not
be feasible or have higher costs.
Source: IRENA. (2022). Global Hydrogen Trade to Meet
the 1.5°C Climate Goal: Part I - Trade Outlook for
2050 and Way Forward. In Global Hydrogen Trade to
Meet the 1.5°C Climate Goal: Trade Outlook for 2050
and Way Forward.

5. European Climate Law
Source: European Parliament. (2021). BRIEFING Towards climate neutrality: Fit for 55 package. December. https://www.europarl.europa.eu

6. Aviation, Maritime and Road
transportation
Year
Minimum Share of… (over the total of aviation fuel)
SAF (of which) synthetic fuel
2025 2% -
2030 5% 0.7%
2035 20% 5%
2040 32% 8%
2045 38% 11%
2050 63% 28%
ReFuelEU Aviation
Year CO2 emissions Reduction [X gCO2eq/MJ]
2025 -2%
2030 -6%
2035 -13%
2040 -26%
2045 -59%
2050 -75%
FuelEU Maritime
Period Cars (M1) Vans (N1)
CO2 emission
target
ZLEV share CO2 emission
target
ZLEV share
2021-2024 95 gCO2 / km - 147 gCO2 / km -
2025-2029 -15% 15% -15% 15%
2030-2034 -37.5% (-55%)* 35% -31% (-50%)* 30%
2035+ -100% 100% -100% 100%
Road Transportation
Period Member State
2021 -
2025
2026 -
2030
Trucks (N2, N3)
Italy, Germany, Netherlands, 10% 15%
Spain 10% 14%
Romania 6% 7%
Buses (M3)
Italy, Germany, Netherlands, 45% 65%
Spain 45% 65%
Romania 24% 33%
Light-duty vehicles
Italy, Germany, Netherlands, 38,5% 38,5%
Spain 36,3% 36,3%
Romania 18,7% 18,7%
Table 11: Minimum procurement targets for the share of clean light and heavy-duty vehicles in the total number
of light and heavy-duty vehicles (according to Table 3 and 4 of the ANNEX of Directive (EU) 2019/1161)

7. Alternative Fuel Infrastructure
Regulation (AFIR)
(a) (b)
(c) (d)
Figure 13: TEN-T core network representation. (a) Inland waterways and ports, (b) Railways (freight), ports and rail
road terminals (RRT), (c) Roads, ports, rail road terminals (RRT) and airports and (d) Railways (passengers) and
airports
Object and Article Reference Max Distance / Criteria Year
Electric light-duty vehicles
(Art. 3)
Member State registered EV 1 kW per EV every year
Member State registered
PHEV
0.66 kW per PHEV
TEN-T Core Network 60 km 31 Dec 2025
TEN-T Core Network 60 km 31 Dec 2030
Electric heavy-duty vehicles
(Art. 4)
Urban Nodes 1 per urban node 31 Dec 2025
Urban Nodes 1 per urban node 31 Dec 2030
Safe and secure parking 1 per safe parking 31 Dec 2030
TEN-T Core Network 60 km 31 Dec 2025
TEN-T Core Network 60 km 31 Dec 2030
TEN-T Comprehensive
Network
100 km 31 Dec 2030
TEN-T Comprehensive
Network
100 km 31 Dec 2035
Hydrogen refuelling stations
for road vehicles (Art. 6)
Urban nodes 1 per urban node 31 Dec 2030
TEN-T Core and
Comprehensive Network
450 km 31 Dec 2030
shore-side electricity supply
in maritime ports Member
(Art. 9) and inland waterway
ports (Art. 10)
TEN-T core and TEN-T
comprehensive maritime
ports
90 % demand satisfied
per port
1 Jan 2030
TEN-T Core Network 1 shore-side electricity
supply per inland port
1 Jan 2025
TEN-T Core Network 1 Jan 2030
supply of electricity to
stationary aircraft Member
(Art. 12)
TEN-T Core and
Comprehensive Network
at all gates 1 Jan 2025
at all outfield posts 1 Jan 2030

8. Financial aspects: alternative fuels costs
0
500
1000
1500
2000
2500
3000
3500
4000
Bioethanol
(Straw)
Bioethanol
(Tree
Prunings)
Blended
Biomethane
(MSW)
Biomethane
(MSW)
Blended
Biomethane(Tree
Prunings)
Hydrotreated
Vegetable
Oils
(HVO)
Methane
Fischer-Tropsch
Liquids
Methanol
to
Petrol
Petrol
(at
50
€/bbl)
Petrol
(at
100
€/bbl)
Petrol
(at
150
€/bbl)
Diesel
(at
50
€/bbl)
Diesel
(at
100
€/bbl)
Diesel
(at
150
€/bbl)
Fossil
H2
(SMR)
Hydrogen
(Electrolysis)
Natural
Gas
Fossil
Hydrogen
(SMR)
Ethanol
(50
€/tonne)
(Steel
Mill)
Ethanol
(75
€/tonne)
(Steel
Mill)
Ethanol/Methanol
(at
0
€
feedstock)
Biofuel efuel Fossil Fuel Hydrogen Recycled Carbon Fuel
COST
[€/TOE]
2020 (€/toe) 2030 (€/toe) 2040 (€/toe) 2050 (€/toe)
Source: Paris, B., Papadakis, G., Janssen, R., & Rutz, D. (2021). Economic analysis of advanced biofuels, renewable gases, electrofuels and recycled carbon fuels for the Greek transport
sector until 2050. Renewable and Sustainable Energy Reviews, 144(February), 111038. https://doi.org/10.1016/j.rser.2021.111038

9. Non-financial aspects: storage capacity, valley
of death, and maximum range for vehicles
Source: 1) IEA. (2015). Technology Roadmap Hydrogen and Fuel Cells. 2) European Commission.
(2017b). Energy storage – the role of electricity. Commission Staff Working Document, 25. 3)
Ball, M., & Weeda, M. (2016). The hydrogen economy—Vision or reality? In Compendium of
Hydrogen Energy. Elsevier Ltd.

10. Non-financial aspects: environmental
impact
Source: Ocko, I. B., & Hamburg, S. P
. (2022a). Climate consequences of hydrogen emissions. Atmospheric Chemistry and Physics, 22(14), 9349–9368.
Reaction Where Direct Effect Indirect effect
H2 + 2OH ->
2H2O
Troposphere
Increased lifetime and concentration of
methane (CH4)
CH4 warms the climate for a longer period
chain reaction Troposphere Increased Ozone (O3) concentration
higher concentration of Ozone increases global
warming
H2 + 2OH ->
2H2O
Stratosphere Increased water vapor
Cooling of stratosphere, increased infrared capability
and global warming effect

11. Non-financial aspects: substitution rate
and average age of vehicles in Europe
Source: ACEA. (2023a). Fuel types of new cars: battery electric 12.1%, hybrid 22.6% and petrol 36.4% market share full-year 2022. https://www.acea.auto/fuel-pc/fuel-types-of-new-cars-
battery-electric-12-1-hybrid-22-6-and-petrol-36-4-market-share-full-year-2022/
(a) Cars (b) Vans

12. Identification of barriers
Existing financial and non financial barriers to the development of hydrogen in Europe
and in Italy are of different nature including, among other aspects,
 the high cost of plants (both CAPEX and OPEX) and the low efficiency of plants
 the low existing supply and demand able to stimulate a rapid development
together with the nearly non-existent required infrastructure, ending in a non-
functioning national/European market (beyond the industrial sector)
 the lack of a clear legal framework regarding safety and risk assessment as
well as related to the different nature of hydrogen (e.g. blue and green),
 other aspects, such as the scarce information in final users regarding the most
advanced biofuels, from synthetic fuels to the hydrogen itself and the scarce
understanding of the impact of hydrogen emissions at the global scale.

13. Towards sector-coupling
Source: Chehade, Z., Mansilla, C., Lucchese, P
., Hilliard, S., & Proost, J. (2019). Review and analysis of demonstration projects on power-to-X pathways in the world. International Journal of
Hydrogen Energy, 44(51), 27637–27655. https://doi.org/10.1016/j.ijhydene.2019.08.260
Name Acronym Description
Power-to-
Hydrogen
PtH
Hydrogen production from low-carbon or renewable
energy
Hydrogen-to-
Power
HtP Electricity production from hydrogen through fuel cells
Hydrogen-to-Gas
HtG-H2 Hydrogen injection into natural gas (or ad hoc) grid
HtG-M
Synthetic methane injection into natural gas grid
produced from PtH processes (methanation)
Hydrogen-to-Fuel
HtF-H2 Consumption of hydrogen into FCEV
HtF-S
Liquid synfuel applications: liquid biofuels, synthetic
liquid fuels, methanol
HtF-G Biogas and synthetic methane for mobility
Hydrogen-to-
Industry
HtI Hydrogen from PtH for industrial use (e.g. refining)
Hydrogen-to-Heat HtQ H2-fuelled boilers or CHP
Hydrogen-to-
Chemicals
HtC
H2 to methanol, syngas, ammonia and other energy
vectors
Pathway/life cycle phase
Energy Source
(electricity)
Production
(electrolysis)
Methanation Compression
Transport &
Distribution
Fuel Cell / Gas
Turbine
Power-to-Power 100% 73% - 67% - 29%
Power-to-Gas (blending) 100% 73% - 70% 68% 26%
Power-to-Gas (Methanation) 100% 73% 58% 55% 54% 21%
Power-to-Fuel 100% 73% - 67% 54% 24%