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The race to solve the sustainable transport problem via carbon-neutral synthetic fuels and battery electric vehicles

Author

Listed:
  • Hannula, I.
  • Reiner, D.
Abstract
Carbon-neutral synthetic fuels (CNSFs) could offer sustainable alternatives to petroleum distillates that currently dominate the transportation sector, and address the challenge of decarbonising the fuel mix. CNSFs can be divided into synthetic biofuels and 'electrofuels' produced from CO2 and water with electricity. We provide a framework for comparing CNSFs to battery electric vehicles (BEVs) as alternatives to reduce vehicle emissions. Currently, all three options are significantly more expensive than conventional vehicles using fossil fuels, and would require carbon prices in excess of $250/tCO2 or oil prices in excess of $150/bbl to become competitive. BEVs are emerging as a competitive option for short distances, but their competitiveness quickly deteriorates at higher ranges where synthetic biofuels are a lower-cost option. For electrofuels to be viable, the challenge is not simply technological learning, but access to a low-cost ultra-low-carbon electric power system, or to low-carbon electric generators with high annual availability.

Suggested Citation

  • Hannula, I. & Reiner, D., 2017. "The race to solve the sustainable transport problem via carbon-neutral synthetic fuels and battery electric vehicles," Cambridge Working Papers in Economics 1758, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1758
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    More about this item

    Keywords

    Carbon-neutral synthetic fuels; electrofuels; advanced biofuels; battery electric vehicles; low-carbon transportation alternatives;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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