Porsche invests RM316.1 million in synthetic eFuel production – to run nearly CO2-neutral ICE cars

Porsche is investing US$75 million (RM316.1 million) in carbon-neutral fuels producer HIF Global for a long-term stake in the holding company, which is internationally active in fueling facility development projects. eFuel production.

Porsche has launched production of synthetic fuels, or eFuels with HIF Global, with partners including Siemens Energy and ExxonMobil, while HIF Global will build the Haru Oni ​​pilot plant in Punta Arenas, Chile, for the production of eFuels from the middle of this year. .

Here, eFuels will be produced from hydrogen and CO2 capture using wind power, and Porsche’s investment in HIF Global alongside Chilean company Andes Mining & Energy (AME) and American companies EIG, Baker Hughes Company and Gemstone Investments will be used to develop eFuel installations in Chile, the United States and Australia, where large amounts of renewable energy can be found, says Porsche.

Production of eFuels from the Chilean plant will begin in 2024 and is expected to produce 55 million liters of eFuels that year, reaching 550 million liters per year by 2026, said Michael Steiner, head of research and of development at Porsche, during a conference call. , adding that the pilot plant for the production of eFuels generated expenses in the range of “double-digit millions” in US dollars.

While Porsche is heading towards 80% pure EV sales volume by 2030, that’s still 20% that will still be on ICE-based powertrains

How does Porsche’s investment in eFuels fit into the industry’s move towards electrification? This will complement the brand’s drive towards e-mobility, Steiner said.

“We have solid plans to be one of the fastest players [in electrification]”, he said, adding that by 2030, 80% of all new Porsches sold by 2030 will be fully electric, which still leaves 20% for new models with engine-based powertrains. internal combustion.

“With 1.3 billion combustion engine cars on the road, we will have such cars for decades to come, and to be faster in decarbonizing and reducing dependence on fossil fuels, we need eFuels in addition to e-mobility,” explained Steiner. About more than 70% of all Porsche 911s built since 1963 are still on the road, he later added.

Sustainability will come at a price, at least initially, so how willing would consumers be to pay a premium for sustainable fuels? “Our principle, if it comes to larger volumes [of eFuels]is that there won’t be a major price mark-up, although there might be customers or potential customers who would be willing to pay a small premium for the fuel to be sustainable,” Steiner said.

As for the eFuels business model, Porsche “doesn’t plan to be huge producers or sellers of fuels,” Steiner said. The German automaker has already deployed bio-based renewable fuel for the Supercup single-brand racing series where racers field the 992-generation 911 GT3 Cup.

It’s a second-generation biofuel called Esso Renewable Racing Fuel that’s already “very close” to the eFuels that will be rolled out to the racing series in the second half of this year, Porsche’s head of R&D said.

That said, as eFuels production increases, the deployment will be wider and more racing formats with Porsche’s participation will use eFuels in time, Steiner said. There will also be wider use of eFuels at Porsche Experience Centers around the world to help the automaker’s ICE cars operate at or near carbon neutrality, he added.

The main problem in terms of price would be the taxation of these alternative fuels, said the head of Porsche R&D; if fuel taxes are considered in terms of CO2, there are many possible measures where alternative fuels such as eFuels could benefit from tax reductions in order to balance the comparatively higher costs of these fuels so that they are at prices competitive with traditional fossil fuels, he said.

There could also be measures such as quotas, where perhaps legislation could require that a certain percentage of eFuels be blended with fossil fuels “in order to give these innovative fuels a chance in the market”, suggested Steiner, so the company does not believe the main driver of demand will be the willingness to pay for eFuels, but rather through the process of several legislative and regulatory measures that will help the automotive industry transition from fossil fuels. to renewable fuels.

In terms of compatibility, there are generally no modifications required for normal gasoline-powered vehicles to work with eFuels, Steiner said, because it was designed to specifications that match fuels sold at the pump today. Like biofuel-based gasolines, eFuels contain “some percentage” of ethanol, albeit with longer alcohol molecules in the case of eFuels.

The same advice applies to its use in older cars; some may need additives for eFuels to be compatible with sealants and other rubber parts in fuel lines, but otherwise it’s the same story with biofuels, where the cars on sale today will be compatible with eFuels.

Beyond consumption in the automotive industry, there are opportunities for eFuels in other areas such as logistics sectors, where shipping remains largely powered by fossil fuels, Steiner said during of the conference call.

Movements are already underway towards renewable energy sources, where a trend is emerging in the shift from diesel fuel to methanol for marine engines used by companies such as Maersk, Steiner noted.

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