press release, Brussels

Global Alliance Powerfuels presents guidelines for market development

Auctions, blending quotas and CO2 pricing promise rapid progress for electricity-based fuels

The Global Alliance Powerfuels - a cross-industry alliance of companies and associations - presented a guideline paper for the development of a global market for electricity-based, renewable fuels (powerfuels) at an event with decision makers from politics and industry in Brussels on Monday. As political instruments, the Global Alliance cites: auctions for the production of powerfuels, the legal recognition of their benefits for climate protection, fuel blending quotas, and the pricing of greenhouse gas emissions. Countries that take these measures can thus pave the way for climate-friendly competition in the energy market and greater planning security for manufacturers and investors.

Andreas Kuhlmann, spokesman for the Global Alliance Powerfuels and Chief Executive of the German Energy Agency (dena), said at the presentation of the guideline paper: “Powerfuels offer solutions for energy transition and climate protection where energy efficiency and renewable electricity alone are not enough. In order for them to develop their potential, fair framework conditions for CO2-saving technologies are needed. More and more governments and companies are beginning to address this issue. In our guideline paper we show which principles should guide political action and which measures are necessary.”

EU states can take on pioneering role

In principle, the economic and regulatory framework should be geared towards the long-term avoidance of greenhouse gas emissions, in line with the requirements of the Paris Climate Agreement. The damage caused by fossil fuels such as heating oil, petrol, diesel or kerosene with their greenhouse gas emissions, is not adequately taken into account in current prices. If the polluter-pays principle was to be consistently applied, powerfuels would have significantly better chances on the market. Suitable measures include emissions trading systems, minimum prices and taxes, as well as the reduction of subsidies for fossil fuels. Revenues from pricing greenhouse gas emissions could be used, among other things, to support the development of powerfuels.

In the development phase, the focus should be on measures that promise rapid progress. Auctions for the sale of powerfuels, as already being prepared in Germany, would give market players a high degree of planning security and stimulate competition. A similar effect would be achieved by fuel blending quotas, especially in internationally regulated sectors such as air transport and shipping. Such quotas are already laid down in the Renewable Energy Directive of the European Union (EU), but would have to be further developed at national level for the inclusion of powerfuels. The recognition of powerfuels as a climate-friendly, renewable technology in existing energy legislation could be achieved at relatively short notice. If individual countries or unions such as the EU take the initiative here, this could decisively advance the development of a global market for powerfuels and open up opportunities for industrial policy.

The guideline paper and further information on the Global Alliance Powerfuels is available at: www.powerfuels.org.

About Global Alliance Powerfuels

Powerfuels are gaseous or liquid fuels generated from renewable energy sources such as wind or solar power. The renewable electricity drives an electrolysis process that produces hydrogen from water. The hydrogen can either be used directly or further processed into energy sources that can replace conventional gas or oil as required, be it as fuel in transport or for heat and electricity generation, or as raw material in the chemical industry. The conversion processes are known under terms such as power to gas and power to liquid.

The Global Alliance Powerfuels aims to build a global market for electricity-based fuels from renewable energy sources. It provides information about the potential of powerfuels, makes recommendations for the development of suitable framework conditions and initiates pilot projects. It was founded at the end of 2018 by international companies and associations from the energy and renewable energy, automotive and aviation, chemical and petroleum, mechanical and plant engineering sectors.

The members of the Global Alliance are Audi, Bosch, German Aviation Association (BDL), Daimler, Deutsche Post DHL, Deutscher Verband Flüssiggas, Enertrag, Institut für Wärme und Öltechnik (IWO), Lufthansa, MEW Mittelständische Energiewirtschaft Deutschland, Mitsubishi, Mineralölwirtschaftsverband (MWV), Paul Wurth, Schaeffler, Shell, Sunfire, Uniper, UNITI Bundesverband mittelständischer Mineralölunternehmen. The German Energy Agency (dena) coordinates the activities of the Global Alliance as the initiator.

The recording of the live stream of the event "Powerfuels in the European energy transition: The need for effective regulation" on 17 June in Brussels is available at www.powerfuels.org/live.

teaser image: shutterstock.com/Paul_K

Paper: Guidelines for Market Development

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