IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v16y2023i17p6399-d1232715.html
   My bibliography  Save this article

Feasibility of Green Hydrogen-Based Synthetic Fuel as a Carbon Utilization Option: An Economic Analysis

Author

Listed:
  • J. Lemuel Martin

    (Cambridge Centre for Advanced Research and Education in Singapore (CARES), 1 CREATE Way, Singapore 138602, Singapore
    Energy Research Institute @ NTU (ERI@N), Nanyang Technological University, Singapore 637141, Singapore)

  • S. Viswanathan

    (Energy Research Institute @ NTU (ERI@N), Nanyang Technological University, Singapore 637141, Singapore
    Nanyang Business School, Nanyang Technological University, Singapore 639798, Singapore)

Abstract

Singapore has committed to achieving net zero emissions by 2050, which requires the pursuit of multiple decarbonization pathways. CO 2 utilization methods such as fuel production may provide a fast interim solution for carbon abatement. This paper evaluates the feasibility of green hydrogen-based synthetic fuel (synfuel) production as a method for utilizing captured CO 2 . We consider several scenarios: a baseline scenario with no changes, local production of synfuel with hydrogen imports, and overseas production of synfuel with CO 2 exports. This paper aims to determine a CO 2 price for synfuel production, evaluate the economic viability of local versus overseas production, and investigate the effect of different cost parameters on economic viability. Using the current literature, we estimate the associated production and transport costs under each scenario. We introduce a CO 2 utilization price (CUP) that estimates the price of utilizing captured CO 2 to produce synfuel, and an adjusted CO 2 utilization price (CCUP) that takes into account the avoided emissions from crude oil-based fuel production. We find that overseas production is more economically viable compared to local production, with the best case CCUP bounds giving a range of 142–148 $/t CO 2 in 2050 if CO 2 transport and fuel shipping costs are low. This is primarily due to the high cost of hydrogen feedstock, especially the transport cost, which can offset the combined costs of CO 2 transport and fuel shipping. In general, we find that any increase in the hydrogen feedstock cost can significantly affect the CCUP for local production. Sensitivity analysis reveals that hydrogen transport cost has a significant impact on the viability of local production and if this cost is reduced significantly, local production can be cheaper than overseas production. The same is true if the economies of scale for local production is significantly better than overseas production. A significantly lower carbon capture cost can also the reduce the CCUP significantly.

Suggested Citation

  • J. Lemuel Martin & S. Viswanathan, 2023. "Feasibility of Green Hydrogen-Based Synthetic Fuel as a Carbon Utilization Option: An Economic Analysis," Energies, MDPI, vol. 16(17), pages 1-20, September.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:17:p:6399-:d:1232715
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/16/17/6399/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/16/17/6399/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cameron Hepburn & Ella Adlen & John Beddington & Emily A. Carter & Sabine Fuss & Niall Mac Dowell & Jan C. Minx & Pete Smith & Charlotte K. Williams, 2019. "The technological and economic prospects for CO2 utilization and removal," Nature, Nature, vol. 575(7781), pages 87-97, November.
    2. Lindstad, Haakon & Asbjørnslett, Bjørn E. & Strømman, Anders H., 2012. "The importance of economies of scale for reductions in greenhouse gas emissions from shipping," Energy Policy, Elsevier, vol. 46(C), pages 386-398.
    3. John Bistline & Geoffrey Blanford & Maxwell Brown & Dallas Burtraw & Maya Domeshek & Jamil Farbes & Allen Fawcett & Anne Hamilton & Jesse Jenkins & Ryan Jones & Ben King & Hannah Kolus & John Larsen &, 2023. "Emissions and Energy Impacts of the Inflation Reduction Act," Papers 2307.01443, arXiv.org.
    4. Vishal Ram & Surender Reddy Salkuti, 2023. "An Overview of Major Synthetic Fuels," Energies, MDPI, vol. 16(6), pages 1-35, March.
    5. Patrick Buchenberg & Thushara Addanki & David Franzmann & Christoph Winkler & Felix Lippkau & Thomas Hamacher & Philipp Kuhn & Heidi Heinrichs & Markus Blesl, 2023. "Global Potentials and Costs of Synfuels via Fischer–Tropsch Process," Energies, MDPI, vol. 16(4), pages 1-18, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tiruwork B. Tibebu & Eric Hittinger & Qing Miao & Eric Williams, 2024. "Adoption Model Choice Affects the Optimal Subsidy for Residential Solar," Energies, MDPI, vol. 17(3), pages 1-19, February.
    2. Lindstad, Haakon & Bright, Ryan M. & Strømman, Anders H., 2016. "Economic savings linked to future Arctic shipping trade are at odds with climate change mitigation," Transport Policy, Elsevier, vol. 45(C), pages 24-30.
    3. Guido Busca, 2024. "Critical Aspects of Energetic Transition Technologies and the Roles of Materials Chemistry and Engineering," Energies, MDPI, vol. 17(14), pages 1-32, July.
    4. Michael Carus & Lara Dammer & Achim Raschka & Pia Skoczinski, 2020. "Renewable carbon: Key to a sustainable and future‐oriented chemical and plastic industry: Definition, strategy, measures and potential," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 10(3), pages 488-505, June.
    5. Xing, Hui & Spence, Stephen & Chen, Hua, 2020. "A comprehensive review on countermeasures for CO2 emissions from ships," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    6. Joey Disch & Luca Bohn & Susanne Koch & Michael Schulz & Yiyong Han & Alessandro Tengattini & Lukas Helfen & Matthias Breitwieser & Severin Vierrath, 2022. "High-resolution neutron imaging of salt precipitation and water transport in zero-gap CO2 electrolysis," Nature Communications, Nature, vol. 13(1), pages 1-9, December.
    7. Moreaux, Michel & Amigues, Jean-Pierre & van der Meijden, Gerard & Withagen, Cees, 2024. "Carbon capture: Storage vs. Utilization," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    8. Tihamér Tibor Sebestyén, 2024. "Evaluation of the Carbon Footprint of Wooden Glamping Structures by Life Cycle Assessment," Sustainability, MDPI, vol. 16(7), pages 1-27, March.
    9. Georgios Varvoutis & Athanasios Lampropoulos & Evridiki Mandela & Michalis Konsolakis & George E. Marnellos, 2022. "Recent Advances on CO 2 Mitigation Technologies: On the Role of Hydrogenation Route via Green H 2," Energies, MDPI, vol. 15(13), pages 1-38, June.
    10. Tuğçe Beyazay & Kendra S. Belthle & Christophe Farès & Martina Preiner & Joseph Moran & William F. Martin & Harun Tüysüz, 2023. "Ambient temperature CO2 fixation to pyruvate and subsequently to citramalate over iron and nickel nanoparticles," Nature Communications, Nature, vol. 14(1), pages 1-11, December.
    11. Subrato Acharjya & Jiacheng Chen & Minghui Zhu & Chong Peng, 2021. "Elucidating the reactivity and nature of active sites for tin phthalocyanine during CO2 reduction," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 11(6), pages 1191-1197, December.
    12. Maxwell Brown & Matthew Irish & Daniel Steinberg & Tamar Moss & Daniel P. Cherney & Travis Shultz & David Morgan & Alexander Zoelle & Thomas Schmitt, 2024. "Representing Carbon Dioxide Transport and Storage Network Investments within Power System Planning Models," Energies, MDPI, vol. 17(15), pages 1-24, July.
    13. Chang, Yuan & Gao, Siqi & Ma, Qian & Wei, Ying & Li, Guoping, 2024. "Techno-economic analysis of carbon capture and utilization technologies and implications for China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 199(C).
    14. Rafaty, R. & Dolphin, G. & Pretis, F., 2020. "Carbon pricing and the elasticity of CO2 emissions," Cambridge Working Papers in Economics 20116, Faculty of Economics, University of Cambridge.
    15. Lee, Tsung-Chen & Chang, Young-Tae & Lee, Paul T.W., 2013. "Economy-wide impact analysis of a carbon tax on international container shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 58(C), pages 87-102.
    16. Cameron Hepburn & Brian O’Callaghan & Nicholas Stern & Joseph Stiglitz & Dimitri Zenghelis, 2020. "Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(Supplemen), pages 359-381.
    17. Chen, S. & Shi, W.K. & Yong, J.Y. & Zhuang, Y. & Lin, Q.Y. & Gao, N. & Zhang, X.J. & Jiang, L., 2023. "Numerical study on a structured packed adsorption bed for indoor direct air capture," Energy, Elsevier, vol. 282(C).
    18. Wu Yang & Zhang Min & Mingxing Yang & Jun Yan, 2022. "Exploration of the Implementation of Carbon Neutralization in the Field of Natural Resources under the Background of Sustainable Development—An Overview," IJERPH, MDPI, vol. 19(21), pages 1-28, October.
    19. Thomas Deschamps & Mohamed Kanniche & Laurent Grandjean & Olivier Authier, 2022. "Modeling of Vacuum Temperature Swing Adsorption for Direct Air Capture Using Aspen Adsorption," Clean Technol., MDPI, vol. 4(2), pages 1-18, April.
    20. Yu Yong Ung & Park Sung Ho & Jung Dong Ho & Lee Chang Hee, 2020. "Improving Liquefied Natural Gas Bunkering in Korea through the Chinese and Japanese Experiences," Sustainability, MDPI, vol. 12(22), pages 1-15, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:16:y:2023:i:17:p:6399-:d:1232715. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.