Technological watch
The competitiveness of low-carbon fuels depends on location
In a new study, researchers at the Paul Scherrer Institute PSI compare the production costs of 21 different low-carbon fuel technologies across the globe. Their analysis shows that location-specific factors including both resource availability and financing conditions will be decisive for the future success of a given technology.
A new PSI study shows that the competitiveness of low-carbon fuels depends strongly on location and financing conditions. © Adobe StockLow-carbon fuels — such as biofuels derived from biomass or synthetic fuels produced using power-to-X technologies based on renewable electricity — generate significantly fewer greenhouse gas emissions than fossil alternatives.
These fuels are considered essential for reaching climate targets, particularly in so-called “hard-to-abate” sectors, including aviation, maritime shipping, and specific industrial processes. In these areas, direct electrification often reaches technical limits due to the high energy density required or the very high process temperatures involved.
Where and under which conditions these fuels can be produced most cost-effectively has remained unclear. Previous studies typically focused on individual technologies or regions, making global comparisons difficult. In a new study, Zipeng Liu and colleagues at the PSI Laboratory for Energy Systems Analysis have now addressed this question.
The team presents a comprehensive techno-economic assessment of twenty-one low-carbon fuel production technologies. Using a harmonised and globally consistent framework, they compare costs across countries and over time — from 2024 to 2050 — under multiple scenarios.
The analysis confirms that no single technology will dominate globally. Instead, costs vary significantly between regions, depending on local resources and financing conditions. The findings are .
A new PSI study shows that the competitiveness of low-carbon fuels depends strongly on location and financing conditions. © Adobe StockLow-carbon fuels — such as biofuels derived from biomass or synthetic fuels produced using power-to-X technologies based on renewable electricity — generate significantly fewer greenhouse gas emissions than fossil alternatives.
These fuels are considered essential for reaching climate targets, particularly in so-called “hard-to-abate” sectors, including aviation, maritime shipping, and specific industrial processes. In these areas, direct electrification often reaches technical limits due to the high energy density required or the very high process temperatures involved.
Where and under which conditions these fuels can be produced most cost-effectively has remained unclear. Previous studies typically focused on individual technologies or regions, making global comparisons difficult. In a new study, Zipeng Liu and colleagues at the PSI Laboratory for Energy Systems Analysis have now addressed this question.
The team presents a comprehensive techno-economic assessment of twenty-one low-carbon fuel production technologies. Using a harmonised and globally consistent framework, they compare costs across countries and over time — from 2024 to 2050 — under multiple scenarios.
The analysis confirms that no single technology will dominate globally. Instead, costs vary significantly between regions, depending on local resources and financing conditions. The findings are .
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 870292.
