Do synthetic fuels exist?

Yes. Synthetic fuels—often called e-fuels or synfuels—are already being produced and used in limited, early-commercial volumes today, with pilot plants operating on several continents and first customers in aviation, shipping, and motorsports. While supplies remain scarce and costs are high, scaling plans and policy mandates are accelerating development through the late 2020s and early 2030s.

What synthetic fuels are

Synthetic fuels are liquid or gaseous hydrocarbons made by combining hydrogen with a carbon source (often captured CO2), typically using renewable electricity to minimize emissions. They are designed to serve as “drop-in” or near drop-in replacements for conventional fossil fuels, enabling use in existing engines, aircraft, and infrastructure.

• E-fuels (power-to-fuels): hydrocarbons made from green hydrogen and captured CO2 (e.g., e-kerosene, e-diesel, e-gasoline).
• Synthetic aviation fuel (e-SAF): e-kerosene suited for jet engines, blended today with conventional jet fuel.
• Synthetic methane: pipeline-quality methane made from green hydrogen and CO2 (sometimes called e-methane or synthetic natural gas).
• E-methanol: methanol produced from green hydrogen and CO2; increasingly used in shipping.
• Synthetic ammonia: nitrogen and green hydrogen combined to make ammonia; explored for shipping and as a hydrogen carrier.

These fuels aim to be near carbon-neutral over their life cycle when powered by renewable electricity and when their carbon comes from atmospheric or biogenic sources, not fossil extraction.

How they are made

Most synthetic fuel pathways share a common sequence: produce clean hydrogen, source carbon, synthesize hydrocarbons, and refine to engine-ready products. The specific chemistry varies by fuel type.

1. Renewable hydrogen: Electricity splits water via electrolysis to create hydrogen, ideally using wind, solar, hydro, or nuclear power.
2. CO2 supply: Carbon is captured from the air (direct air capture) or from biogenic/industrial streams to provide the carbon backbone.
3. Synthesis: Common routes include Fischer–Tropsch synthesis (via syngas), methanol synthesis followed by methanol-to-jet/gasoline, and Sabatier reaction for methane.
4. Upgrading and refining: Raw synthetic hydrocarbons are refined into gasoline, diesel, kerosene, or marine blends meeting existing standards.
5. Distribution and use: Finished fuels are blended or used neat in engines, leveraging existing storage and transport networks.

The end result is a fuel that can run in today’s engines, but its climate impact depends heavily on clean electricity, the carbon source, and the efficiency of the process.

Where they’re being produced today

Early commercial and pilot plants are operating now, with additional projects under construction or in development across the Americas, Europe, and Asia. Volumes remain small relative to total fuel demand, but the project pipeline is growing.

• Chile (Punta Arenas): HIF Global’s Haru Oni pilot plant has produced e-gasoline from wind-powered hydrogen and captured CO2, with demonstration use by Porsche and others, and larger follow-on plants planned in the Americas.
• Germany (Werlte): atmosfair’s e-kerosene facility has delivered small volumes of synthetic jet fuel for blending, one of the first of its kind connected to airport supply chains.
• Norway: Norsk e-Fuel is developing an e-kerosene plant using CO2 capture and high-temperature electrolysis, targeting first production later this decade.
• United States: Firms such as Infinium are bringing online e-diesel and e-jet projects that convert captured CO2 and green hydrogen into fuels, with early offtake agreements from logistics and aviation customers.
• Denmark and Iceland: E-methanol is in commercial use, with European Energy supplying green methanol to shipping (including Maersk) and Carbon Recycling International producing methanol from CO2 and hydrogen.
• Solar-thermal routes: Synhelion has commissioned a solar-fuels demonstration plant in Germany to synthesize drop-in fuels using high-temperature solar heat, with industrial-scale facilities planned.

These projects illustrate that synthetic fuels are beyond the lab: they exist at pilot and early-commercial scale, though far from the quantities needed for broad market replacement.

Who needs them—and why

Synthetic fuels are not the most efficient way to use clean electricity, but they can decarbonize sectors that are hard to electrify directly or that require energy-dense liquid fuels.

• Aviation: Long-haul flights need energy-dense liquid fuels; e-SAF is one of the only practical near-term options.
• Shipping: E-methanol, e-ammonia, and synthetic diesel are pathways for ocean-going vessels.
• Heavy-duty transport and remote operations: Where charging is difficult or duty cycles are extreme, drop-in fuels can bridge gaps.
• Legacy vehicles and motorsport: Synthetic fuels can reduce lifecycle emissions in existing internal combustion engines.
• Defense and emergency services: Drop-in compatibility and storability are crucial for critical operations.

In each case, synthetic fuels leverage existing engines and infrastructure, reducing transition friction while cleaner propulsion systems scale.

Benefits and trade-offs

Like any technology, synthetic fuels come with advantages and limitations that shape where they make the most sense.

• Pros: Drop-in compatibility; potential lifecycle carbon neutrality; lower sulfur and aromatics, reducing some local pollutants; critical for hard-to-electrify sectors.
• Cons: High cost today; energy-intensive (well-to-wheel efficiency can be 10–20% for cars vs. 70–80% for battery-electric); limited supply; tailpipe NOx and particulates still occur (though generally lower aromatics can help).
• Dependencies: Availability of abundant, low-cost clean electricity; robust CO2 capture; and supportive policy frameworks.

The technology’s climate value hinges on clean inputs and careful accounting; otherwise, synthetic fuels risk shifting emissions rather than cutting them.

Costs, scale, and outlook

Current production costs are high due to electrolyzer costs, electricity prices, CO2 capture, and small scale. Analysts project significant cost declines with larger plants, cheaper renewables, and improved process integration.

• Today’s costs: e-kerosene and e-diesel often land in the roughly $4–10 per liter range at small scale and early projects, depending on power prices and capture methods.
• Medium-term potential: With scale and cheap renewables, several studies project e-fuel costs falling toward $2–4 per liter in the 2030s in favorable locations.
• Scale gap: Global SAF supply in 2024 was a fraction of jet fuel demand (well under 1%), and e-SAF was a subset of that; rapid build-out is required to meet announced mandates.
• Efficiency reality: Direct electrification remains more energy-efficient for light-duty road transport; synthetic fuels are best targeted where alternatives are limited.

Even with improving economics, synthetic fuels are likely to serve niche-to-strategic roles first—aviation and shipping—before expanding as costs drop and policy support persists.

Policy signals shaping the market

Policy is a major driver, setting demand floors and improving project bankability through credits and mandates.

• European Union: ReFuelEU Aviation mandates rising shares of SAF with a dedicated sub-target for synthetic aviation fuel (e-fuel content), starting this decade and increasing toward 2050.
• United States: Tax credits under the Inflation Reduction Act support clean hydrogen and SAF, improving project economics for e-fuels.
• Road transport: The EU agreed to allow new combustion cars after 2035 only if they run on climate-neutral e-fuels, creating a potential (though narrow) pathway for synthetic fuels in light-duty.
• Maritime: The International Maritime Organization’s decarbonization targets and regional fuel standards are nudging fleets toward e-methanol, ammonia, and synthetic diesel.
• National programs: Japan, the UK, and others are introducing SAF mandates and funding for power-to-liquid projects.

These measures don’t guarantee success, but they are catalyzing investment, long-term offtake agreements, and early commercial plants.

Bottom line

Synthetic fuels do exist—and they are moving from pilot to early commercial use, particularly in aviation and shipping. They will not replace all fossil fuels soon, and they are unlikely to be the most efficient choice for light-duty road transport. But with clean electricity, robust CO2 sourcing, and scaling policy, they can play a crucial role in decarbonizing sectors where energy-dense liquids are indispensable.

Summary

Synthetic fuels are real and in use today at small scale, produced by combining green hydrogen with captured CO2 to make drop-in liquids like e-kerosene, e-diesel, and e-gasoline. Early plants are operating in Chile, Germany, the U.S., and elsewhere, with more under development. Costs remain high and efficiency is lower than direct electrification, but policy mandates and growing investment are driving expansion—especially for aviation and shipping, where alternatives are limited.