Is electrification the only solution to reduce carbon? There’s no question it currently is the most prominent solution. But there are other pathways, too.

Renewable Diesel

In the search for ultra-low carbon renewable fuel products, renewable diesel (RD) stands out. The Oregon Department of Environmental Quality notes that using RD can cut lifecycle greenhouse gas emissions up to 85%, depending on the feedstock. The product offers drop-in compatibility to petroleum diesel while providing superior cold-weather performance and longer stability. Production challenges are manageable using modified conventional refining technologies, and a number of refineries have been converted to produce the product. The Energy Information Administration expects nearly six billion gallons of production by 2025.

Renewable diesel generally uses the same feedstocks as biodiesel—soybean oil, beef tallo and palm oil, to name a few. However, with this product and other low-carbon alternatives, renewable versions of the traditional feedstocks (such as those where carbon capture is incorporated into the agricultural processes) help cut the overall carbon intensity even further.

When subsidized, the product is cost competitive with petroleum diesel in states like California, which have low carbon fuel standards and a strong commitment to promoting a net-zero low carbon energy transition. The Wall Street Journal noted that a producer of RD that sold it in California for the same price as petroleum diesel would have lost an estimated $3.88 per gallon in 2022 if not for government incentives, which averaged $4.59 a gallon.

Renewable Gasoline

Renewable gasoline (from several different processes), also called renewable naphtha, green or drop-in gasoline, is a byproduct of renewable diesel production. Like renewable diesel, renewable gasoline is a drop-in fuel with similar energy content and can be blended in higher proportions more easily than ethanol. It is produced from biomass source material (such as crop residues, woody biomass and dedicated energy crops) and meets the same ASTM D4814 specification as gasoline for automotive spark-ignition engine fuel.

Chevron said its renewable gasoline blend can reduce lifecycle CO2 emissions by more than 40% compared to traditional gasoline.

Kaustav Sinha, Chevron’s director of strategic partnerships, noted in 2023 that drop-in fuels, such as renewable gasoline blends and renewable diesel, can work with internal combustion engines and existing fuel infrastructure. That makes them a viable, scalable, lower-carbon option that preserves customer choice. “You don’t have to change your vehicle. You don’t have to buy a new product. You can use the existing fuel infrastructure,” he said.

Gevo, an American renewable chemicals and advanced biofuels company, provides a renewable gasoline made from renewable feedstocks such as low-carbon crops and other biomass resources. Currently, these products are available in Seattle under a long-term contract. Gevo also has contracted volumes being sold to its partner Haltermann Carless where it is used in high-end racing applications and packaged fuels for outdoor equipment.

Neste, the world’s leading producer of renewable diesel, has also developed renewable gasoline.

You don’t have to change your vehicle. You don’t have to buy a new product. You can use the existing fuel infrastructure.”

“With Neste’s renewable gasoline, greenhouse gas emissions can be reduced by up to 65% compared to fossil gasoline. Thus, countries could raise their national ambitions to reduce even more greenhouse gas emissions as the industry is able to introduce new, impactful solutions,” said Carl Nyberg, executive vice president, renewable road transportation at Neste.

The aim for Neste is to improve this figure and eventually achieve up to 90% emission reduction with fuel use. This would mean that greenhouse gas emissions over the lifecycle of the fuel would be equivalent to those from an electric vehicle.

Cost is not the greatest impediment. Currently, the fuel sold in Seattle has a premium of approximately $1.50 over petroleum gasoline. The biggest challenge is production volumes, which are currently limited. However, that volume is increasing.

Just how far out is renewable gasoline as a solution?

“Renewable gasoline is on the same production stream as renewable diesel, so I think we’ll start seeing more renewable gasoline in the market in the next five years,” said John Eichberger, director of the Transportation Energy Institute. “Not high volumes, but certainly more than we have now.”

E-Fuels

E-fuels (electric fuels) are synthetic liquid fuels. They are produced from hydrogen obtained purely from renewable energy and carbon dioxide or carbon monoxide, which can be filtered from the ambient air and a source of electricity.

E-fuels are seen as the sole path to combustion in the EU after it banned the sale of new combustion-engine cars starting in 2035. A last-minute campaign by German officials resulted in an exemption for vehicles that run exclusively on e-fuels.

In 2021, ExxonMobil and Porsche established a partnership to explore e-fuels and began testing them in racing applications. Similarly, Porsche, in conjunction with the German government and other partners, established the Haru Oni pilot plant in Chile in late 2022 to begin trial e-fuel production.

Unfortunately, e-fuel production is extremely costly. It is a bleeding-edge technology, especially with carbon capture from the atmosphere, that is only now being prototyped into demonstration level products. For example, the Haru Oni plant is expected to reach 130,000 liters of synthetic gasoline e-fuel for markets where fuel volumes are typically measured in millions of barrels.

If e-fuel is produced from the lowest carbon intensity methods, such as that from Haru Oni, it can be about 100 times more expensive than gasoline, according to a 2023 article in Hydrogen Insight

A report from Postdam Institute for Climate Impact Research noted that when industrial scale production occurs it could drop as low as about twice the cost of conventional gasoline. However, that would require direct air carbon capture to become much less expensive. Unfortunately, the report also noted a current lack of investment to mainstream large-scale systems.

Higher carbon e-fuel can be produced in greater volumes and at a lower cost (for example using non-renewable electricity) and can serve as a bridge fuel in applications such as sustainable aviation fuel. TEI’s Eichberger sees that technology at least 10 to 15 years away from being practical.

Low Carbon Today

The fuels of the future are just that—for the future. Even under the most ambitious decarbonization projections, conventional internal combustion vehicles will be on the road for decades to come.

One way to reduce carbon today could be a minor increase in ethanol content nationally, which is now almost universally 10% (E10).

“We can go E15 across the board,” Eichberger said. “That’s only a 5% blend increase. So, it’s not the be all end all, but it’s a starting point. I think we need a lifecycle approach where we can reduce carbon emissions at the oil field. We can reduce carbon emissions at the corn field. We can reduce carbon emissions at the refinery and biorefinery.”

Even higher ethanol blends could provide significant carbon reductions today. E85, especially when combined with stable 80%+ ethanol content and vehicles specifically tuned to the fuel, can be competitive with EVs from a lifecycle carbon standpoint, according to Ron Lamberty, chief marketing officer for the American Coalition for Ethanol (ACE).

Many of the liquid-fuel alternatives can be used to fill the needs of different energy sectors interchangeably.

However, replacing gasoline with E85 nationally would be challenging given the volumes required. Especially since ethanol is seen as a potential feedstock for a range of renewable fuel solutions, such as sustainable aviation fuel. A superior alternative would be an E85 hybrid.

ACE has already explored the concept using a 2019 Ford Fusion hybrid and a flex fuel conversion kit. Tracking the ethanol content of the E85 (it can vary by as much as 10%) and calculating carbon intensity (CI) for miles driven, the results are impressive.

“The CI was in the range of 180 grams per mile, which is about 50% better than straight gasoline,” Lamberty said. “And then if you get corn fiber ethanol, that brings the number down further. And if you mix that with renewable naptha, you can get a CI score down to near 80. That’s what a Tesla gets in the lowest carbon electricity states.”

Looking Ahead

The crystal ball for the future of low-carbon fuels has never been murkier. For starters, government policy in the United States and Europe are highly focused on mandating electrification (directly or indirectly through regulatory policies). The issues posed by bringing e-fuel or renewable gasoline to market are entirely comparable with shortfalls in upgrading the electrical grid and providing renewable power generation.

What products will be applied and where is also undetermined. Under net zero, all applications requiring energy will generally require full replacement by renewable alternatives (including electricity generation). Many of the liquid-fuel alternatives rely on the same renewable or bio feedstocks and can be used to fill the needs of different energy sectors interchangeably. Renewable kerosene (basically RD) that uses a range of renewable feedstocks and e-fuels could be used for sustainable aviation fuel or road transportation. The decisions made in each sector will impact all other sectors that could benefit from the same fuel.

Also, states such as California with low-carbon fuel standards will monopolize most of the production of products, like RD, making them virtually unattainable elsewhere.

“Retailers should keep an eye on what their brands are doing, what their customers want, particularly in the commercial sector, and how available these alternative fuels become in their markets,” said Eichberger. “They really have to adapt as the direction of these policies become more apparent.”