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Power-to-X and green fuels: Fruit from the decision tree

Special Focus: Pathways for Sustainable H2

F. GRUSCHWITZ, MAN Energy Solutions, Augsburg, Bavaria, Germany

There is no doubt that green hydrogen (H2) is a crucial element on the path to decarbonization. Unsurprisingly, green H2 and Power-to-X have gained much popularity and public attention. These technologies will not be a flash in the pan. 

Strong programs1 underline that decarbonization has become a serious priority, and many countries have already published ambitious H2 strategies. 

Mature technologies like efuel production are available and enable the use of existing infrastructure. However, much remains to be done to create more viable business cases that will show how derivative fuels (efuels) can successfully complement green H2 in its elemental form and be an important enabler in the ramp-up to a green H2 economy. 

One thing is clear—elemental green H2 will not be a one-size-fits-all solution. Instead, we will have a multi-option scenario where pragmatic approaches will aim at maximum efficiency while ensuring a solid base and ramp-up path are created for a long-term transition to green H2. 

It is helpful to look at the topic from two perspectives to get the complete picture. First, by viewing Power-to-X in the context of how it can play a key role in reaching decarbonization targets. Second, by looking at the main hurdles and success criteria in ramping up a green H2 economy at a global level. 

If we agree that decarbonization is an underlying imperative to save the planet, then a policy comprising four elements can be identified: 

  • Replacing fossil-fueled power generation with renewable energy sources
  • The use of green H2
  • Employing efuels (based on green H2)
  • Carbon capture and storage for hard-to-abate industries.

These four elements may be viewed as a decision tree—when addressing an application that acts as a significant carbon source, all four means of decarbonization must be assessed in the order shown to find the best fit to achieve decarbonization considering all boundary conditions. 

Decarbonization is reliant upon the availability of an abundant amount of renewable energy. Accordingly, extending the capacity of renewable energy generation is of paramount importance. The first question in our quest for decarbonization becomes: Is direct electrification possible? This means, first, replacing all fossil-fueled power generation with renewable energy. However, natural-gas-fueled power plants, for example, may be tolerated as back-up or peakers, as they facilitate the maximum use of renewable energy in the grid while simultaneously ensuring maximum reliability and grid stability. 

Besides electrical energy, heat generation is another of the most significant contributors to carbon emissions. Heat pumps will undoubtedly become successful and can fulfill the demand for heating buildings, but it is no secret that heat-demanding industrial processes are another large contributor to carbon emissions. Direct electrification with heat pumps powered by renewable energy could be an optimal solution in many cases. Large-scale heat pumps that can achieve temperatures rising to hundreds of degrees Celsius are already on the market. 

Continuing through the decision tree for applications that cannot be electrified directly, many examples exist of how the use of green H2 could be a good option. However, following the Pareto principle, some prominent areas particularly suited for decarbonization are identifiable. For example, using green H2 instead of coal for steel production would considerably cut carbon emissions. 

Another good example of a sector ripe for decarbonization with green H2 is within processes that already require substantial amounts of H2. Grey H2 is used and produced by steam reformation with natural gas. One example is fertilizer production, where ammonia as the primary feedstock requires copious amounts of H2. 

In the third stage of the decision tree, when neither direct electrification nor the use of green H2 as a molecule are possible, efuels may be a solution. Efuels are carbon-neutral fuels based on green H2, including synthetic methane, methanol e-kerosene or ammonia produced from green instead of grey H2. 

As such, efuels could play an extremely significant role, acting as a bridge technology and replacing its fossil twin as a carrier medium for green H2 or as a green feedstock for green ammonia for fertilizer production. One of the great advantages of efuels is its direct applicability. 

However, even if we picture a fully electrified, green H2 and efuel-powered world, we must not forget that there are still applications or processes that intrinsically emit larger amounts of carbon. One prominent example is cement production. Large amounts of carbon dioxide (CO2) chemically bound within limestone are released during the calcination process. Pilot projects have already demonstrated that these carbon emissions can be captured, liquefied and stored in subsea locations to reach the target for atmospheric emissions of net-zero. Another method of achieving net-zero would be to use this CO2 to produce methanol as a chemical feedstock; the carbon can then be bound again as part of a cycle. 

A carbon-neutral world to avoid further climate change is within reach without needing to completely change the world, the products we use or our way of life. We can also see that green H2 and Power-to-X are key elements in this transition. The question is: How do we ramp up the green H2 economy? For this, we must consider the whole value chain—the production of green H2 and derivatives, their transport to their application destination and the application itself. In the case of direct reductions in green steel production, some considerable investments will be needed. 

Accordingly, all parts of the value chain must be pushed and ramped up simultaneously. Large, industry-wide programs2 are helping to scale up electrolysis to industrial levels with the accompanying cost reductions. However, the cost reduction of green H2 production alone does not make for a feasible business case when green fuels must compete with fossil fuels without integrating the external cost of additional carbon introduced to the atmosphere. Thus, carbon taxation is needed as well as smart carbon contract programs3 to make larger Power-to-X projects bankable (FIG. 1).

FIG. 1. Electrolyzer and wind farm in Northern Germany.

Setting up a global H2 economy is necessary to leverage renewable energy potential in regions where it cannot be otherwise used and to avoid cannibalizing renewable energy capacities in regions with high demand. This would also help to bring sustainable prosperity to more parts of the world and could solve strong global interdependencies in energy trading. 

Large-scale off-takers such as steel production must be created.4 Even if blue H2 is relied upon in a starting phase, investments can be made and H2 pipeline infrastructures can be created. Subsequently, as soon as green H2 production is at scale, a switch to green H2 is possible with all the major investments made up to that point. As such, it is acceptable for many of the first large Power-to-X projects to rely on efuels, since ocean transport of elemental H2 is challenging. Efuels can complement a green H2 economy, are an enabler for larger electrolyzer plant setups and can resolve the chicken or egg dilemma until H2 grids become available to provide inexpensive transport, storage and distribution options. 

Seen from an industry perspective, we can say that we are ready and eager to shape the future. We are prepared to take the risk and invest in our portfolios’ transformation to provide the necessary technologies. Now, we need the essential political action to ramp up a global green H2 economy and convert decarbonization targets into reality.H2T


1 EU’s Fit-for-55 

2 Germany’s H2.Giga initiative 

3 Germany’s H2.Global 

4 EU IPCEI projects 


FLORIAN GRUSCHWITZ is an active driver in the International Business Development & New Energy Solutions Division at MAN Energy Solutions, with a technology focus on Power-to-X solutions. Dr. Gruschwitz holds a PhD in chemical engineering, an MS in business engineering and a Master of Laws Degree.