French company Elyse Energy secured around $120 million financing from PGGM, Hy24, Bpi France, and Mirova for the development of e-methanol and sustainable aviation fuel (SAF) production projects in France and the Iberian Peninsula.
Projects like these indicate that demand for sustainable fuels is growing given the urgent need to reduce greenhouse gas emissions, respond to regulatory pressures, and meet consumer demand.
However, additional investment is required and the corresponding legislative support to meet the projected growth. Moreover, sustainable fuel logistics must be supported for energy security, economic benefits, and social advantages.
Production and Demand
Sustainable fuel production is expected to increase based on an upward trend in demand. For example, the International Air Transport Association (IATA) projects that SAF will triple this year to 1.9 billion liters. On the other hand, renewable fuel demand exceeds total wind and solar photovoltaic (PV) generation according to the International Energy Agency (IEA) reports.
Of this, modern solid bioenergy represents 75% of fuel demand while liquid biofuels take up 20% in the transport sector and biogases, 5%. Basically, the use of renewable hydrogen and e-fuels is for the transport sector with e-efuels for aviation and maritime applications. In contrast, hydrogen fuel demand mainly stems from the heavy-duty transport sector.
Production for these types of fuels will increase, but given high costs and limited policies restricting uptake, growth prospects for sustainable fuels might be limited. However, if projects at the feasibility stage secure funding such as the financing snagged by Elyse Energy, sufficient production of sustainable fuels can match the demand forecast from all sectors says the IEA report.
Challenges and Constraints
Undeniably, there are several challenges facing the development and production of sustainable fuels. In addition to production hurdles, sustainable fuel logistics is an issue involving a complex interplay of technology, government policies, and industry innovations.
Transportation and storage are crucial factors in ensuring that sustainable fuels get to their destination. In this regard, specific pipelines for transporting liquid fuels like biofuels or hydrogen must be built. Moreover, storing fuels safely and efficiently is vital.
Protecting fuel supplies from theft and sabotage is an area of concern while actions to reduce the environmental impact of fuel transportation and storage must be initiated.
For sustainable fuel logistics to work, a network of fueling stations for vehicles powered by alternative fuels must be built. To illustrate, the growing popularity of electric vehicles (EVs) necessitates adequate charging infrastructure to support their increasing numbers.
Furthermore, delivery routes must be optimized through efficient logistics planning. In this regard, real-time tracking using the Internet of Things (I0T) and artificial intelligence (AI) can help optimize routes and reduce fuel consumption.
Meanwhile, investments in research and development for sustainable fuel production and utilization must continue. Governments also have an important role in creating supportive policies and regulations to promote the adoption of sustainable fuels and technologies.
Efficient sustainable fuel logistics is crucial to ensure that economies function smoothly. It ensures that fuel is available to support industries, transportation, and daily life activities while reducing environmental degradation at the same time.
Article and permission to publish here provided by Cindy Cummings. Originally written for Supply Chain Game Changer and published on December 16, 2024.
Cover image by Ely Penner from Pixabay.