Porsche joins project to create climate-neutral eFuels from wind power

FRANKFURT -- Porsche has joined Siemens Energy and other companies in a pilot program aimed at producing climate-neutral synthetic fuel on an industrial scale from wind power.

Munich-based Siemens Energy is building the 36-million-euro ($44 million) wind power plant in in Magallanes Province in southern Chile.

The plant will produce electrofuels (eFuels) in a process that uses renewable energy, water and carbon dioxide as its main inputs with oxygen as the chief emission.

The final product is a synthetic gasoline that is 90 percent less carbon-intensive than its petroleum-based counterpart, while simultaneously being compatible with existing infrastructure and cars.

The idea could be used in Europe and Africa in areas with wind-swept coastlines.

"Our ideal concept is a standard solution where we can copy-paste the plan to other areas in the world where similar favorable conditions exist," said Armin Schnettler, CEO of the New Energy Business at Siemens Energy.

"We are also considering other locations, Scotland for example is under discussion, as is Iceland and North Africa," Schnettler said.

The project's goal is to produce synthetic fuel by 2026 at a price below 1.5 euros per liter. Currently gasoline in Germany costs about 1.3 euros per liter.

During the initial pilot phase, Porsche has an exclusive contract to purchase the fuel, which it initially plans to use in its Experience Centers as well as in motor sports such as its GT works teams.

The automaker has been researching the field on behalf of its parent, Volkswagen Group. 

"Electromobility is a top priority at Porsche. eFuels for cars are a worthwhile complement to that -- if they are produced in parts of the world where a surplus of sustainable energy is available," Porsche CEO Oliver Blume said in a statement.

Porsche said eFuels can be used in combustion engines and plug-in hybrids, and can make use of the existing network of filling stations.

"As a maker of high-performance, efficient engines, we have broad technical expertise. We know exactly what fuel characteristics our engines need to operate with minimal impact on the climate," Blume said.

The project has a 2.3-megawatt wind park on site supplied by Siemens Gamesa, a Spanish-German wind engineering company, as well as a facility provided by Global Thermostat to trap and store CO2 from the ambient air in a process known as Direct Air Capture.

UK chemicals group Johnson Mathey then turns the two gases into methanol, a highly poisonous substance better known as wood alcohol. Exxon takes this intermediate feedstock and synthesizes it into a fuel that meets existing European Union rules regarding everything from octane content to regulating the presence of carcinogens such as benzene.

The goal is to produce 130,000 liters for Porsche by 2022, for which it will pay 20 million euros -- a high price because the project is in the pilot phase.

That would then scale up to 55 million liters two years later, for which further investment funds would be required.

The plant should eventually be competitive when its output capacity reaches 550 million liters in 2024, enough for over 1 million people to drive their car for nearly a year.

Germany's economy ministry has made an 8.2-million-euro contribution. In June Germany approved a 9-billion-euro strategy to promote hydrogen initiatives at home and globally. As future German demand will not be met by domestic production alone, it aims to build up partnerships overseas to secure imports.

"The project contributes to building up reliable import capacities and the strategic positioning of German companies in this marketplace of the future," the ministry said.

The basic chemistry utilizes a 200-year-old process and industry estimates suggest it takes 9 liters of water and 55 kilowatt-hours of electricity to produce 1 kilogram of hydrogen. Only with the advent of efficient wind parks and, more importantly, a concerted push by EU legislators to tackle climate change has the technology become attractive.

Critics argue however that synthetic fuels are highly inefficient and will have to be heavily subsidized and should prioritized for forms transport that cannot be easily decarbonized, chiefly ships and planes.

Reuters contributed to this report