Authentic e-Fuels: Ensuring Trust and Transparency in the Renewable Energy Supply Chain

From ‘renewable electrons’ to e-fuels at your filling station

Authors: Carsten Stöcker (Spherity GmbH), ChatGPT 4 (OpenAI)

Introduction

The transition towards a sustainable energy future demands not only the development of renewable energy sources but also the establishment of a transparent and trustworthy supply chain.

The journey of renewable electrons to e-fuel filling stations is a critical part of this shift, but it must be accompanied by rigorous systems and digital product passports to verify the authenticity of e-fuels including green hydrogen and their zero-carbon claims.

It shall be understood that e-fuels will play a relevant role only in hard-to-decarbonize sectors like aviation, heavy-load transport, and shipping. e-fuels are also at the heart of recent policy controversies around the EU’s plan to phase out the combustion engine in new cars by 2035.

In this blog post, we will explore the challenges, importance, and solutions for establishing authentic e-fuels in the renewable energy supply chain.

We will discuss the new EU Proposal for a Directive on Green Claims, 22nd Mar 2023, that shall stop companies from making misleading claims about the environmental merits of their products and services. We will also explain the need to establish a digital backbone for Green Claim authenticity and the broader Green Deal policy enforcement.

The Catena-X trust framework is seen as a promising ecosystem for the adoption of the required technologies for authentic e-fuel provenance and the EU’s broader Green Claim and Green Deal Initiatives.

1. The e-fuel supply chain

The e-fuel supply chain [1, 2] is a series of interconnected processes and stakeholders involved in producing, distributing, and utilizing e-fuels, which are synthetic fuels derived from renewable energy sources. The supply chain can be summarized in the following key stages:

1. Renewable energy generation: The first step in the e-fuel supply chain involves generating renewable energy from sources such as solar, wind, or hydropower (and according to EU taxonomy for sustainable activities nuclear energy is as well). Other renewables such as geothermal, tidal, and biomass energy sources can also contribute to the renewable energy mix, though on a smaller scale. This clean energy is essential for producing e-fuels with minimal environmental impact.

2. Electrolysis: Renewable energy is used to power electrolyzers, which split water into hydrogen and oxygen. This process produces green hydrogen, which serves as the foundation for e-fuels.

   
   

   Note: Green hydrogen can already be used as a fuel in fuel cell electric vehicles (FCEVs).

3. Carbon capture: Carbon dioxide (CO2) is captured from various sources, such as industrial emissions or direct air capture, to be used as a feedstock for e-fuel synthesis.

4. Fuel synthesis: Green hydrogen and captured CO2 are combined through chemical processes such as Fischer-Tropsch synthesis or methanol synthesis to produce e-fuels: “Methanol and Ethanol” can be used directly in modified internal combustion engines (ICEs). “Synthetic Hydrocarbons” can be used as direct replacements for conventional gasoline, diesel, and jet fuel, without requiring modifications to existing engines or fuel infrastructure.

5. Distribution: The produced e-fuels are transported through existing or newly developed infrastructure, such as pipelines or tankers, to various distribution points like filling stations or industrial facilities.

6. Utilization: E-fuels are used in various transportation sectors, including aviation, shipping, and road transport, particularly in hard-to-decarbonize applications where electrification is less feasible.

7. Emissions tracking and regulation: Throughout the supply chain, the provenance of e-fuels, their renewable energy sources, and emissions associated with their production must be accurately tracked, verified, and regulated to ensure their environmental benefits.

A transparent and verifiable system is required to track the provenance of e-fuels and their renewable energy sources.

To ensure the credibility of e-fuels in promoting sustainability, it is crucial to establish transparent and verifiable systems, such as Digital Product Passports (DPP) and a cross-industry trust framework, to

• support their adoption in hard-to-decarbonize sectors,

• track the provenance of e-fuels, and

• substantiate their zero-carbon claims throughout the supply chain.

  
  

2. The Role of e-Fuels in Decarbonizing Transportation

Manufacturing e-fuels is both costly and energy-intensive. A 2021 study published in the Nature Climate Change journal found that powering internal combustion engine (ICE) vehicles with e-fuels requires approximately five times more renewable electricity than operating a battery-electric vehicle [3].

Consequently, many scientists argue that e-fuels should be reserved for hard-to-decarbonize sectors like aviation, heavy-load transport, and shipping, which cannot easily rely on electric batteries, unlike passenger cars. The future use of e-fuels in specific transportation sectors remains uncertain, particularly in the context of ICE passenger cars.

However, it is clear that e-fuels will play a crucial role in the above-mentioned decarbonizing hard-to-decarbonize sectors. They will most likely not play a significant role in passenger cars with ICE.

3. Challenges for Establishing Zero-Carbon e-Fuels and the EU Green Claims Directive

Ensuring the authenticity of fuels low or zero-carbon claims is a significant challenge, with issues arising from adjacent industries such as Carbon Credits, Renewable Energy Certificates, and Green Steel. Fraud and greenwashing are substantial concerns, with some companies fabricating “zero-carbon” claims to gain a competitive advantage.

For example, organizations might overstate their carbon credits, misuse renewable energy certificates, or conceal emissions associated with Green Steel production.

These issues highlight the need for a robust and verifiable system to establish the provenance of e-fuels and their renewable energy sources.

The EU recognizes this problem and introduced a Proposal for a Directive on Green Claims on 22nd March 2023 by defining ‘new criteria to stop companies from making misleading claims about environmental merits of their products and services’.

The digital product passport stores verifiable provenance claims — a.k.a. verifiable credentials — that are derived and issued within a qualified trust domain. Hence, verifiable and provenance DPPs will be a critical component for enforcing the EU Green Deal policies.

4. e-Fuels Provenance

Renewable energy provenance refers to the traceability and verification of the origins of renewable energy. In contrast, e-fuel provenance deals with the source, production process, and environmental impact of e-fuels. Ensuring the authenticity of renewable energy and e-fuel provenance is critical for substantiating net-zero claims and promoting a transparent and sustainable energy market.

Authentic e-fuels are those whose claims about renewable energy origins, production processes, and environmental impact can be independently verified and traced back to their sources by any supply chain actor.

5. Digital Backbone for Authentic e-Fuels

Establishing verifiable claims about renewable energy provenance, e-fuel provenance, and trusted transformation processes requires a digital infrastructure.

We propose an infrastructure that utilizes decentralized digital identity, electronic signatures and W3C verifiable credentials to enable supply chain actors to verify the provenance and transformation processes of e-fuels.

Digital identity assigns unique identifiers to entities involved in the e-fuel supply chain, while verifiable credentials provide tamper-proof, cryptographically secure attestations about the provenance and processes of e-fuels.

6. Trust Framework for the Authentic e-Fuels Supply Chain

Creating a secure, compliant, and interoperable e-fuels supply chain requires the establishment of a trust framework and governance. This framework comprises conformance criteria that all systems and processes involved in creating provenance credentials must adhere to.

Key roles within the trust framework include the Supervisory Body, responsible for monitoring compliance; the Conformance Assessment Body, evaluating adherence to the framework; and the Standards Setting Organization, establishing industry standards.

The Catena-X Trust Framework [4] serves as an example of a robust and transparent system designed to ensure the authenticity of e-fuels throughout the supply chain.

7. Verifiable Digital Product Passport (DPP) for e-Fuels

The concept of a Digital Product Passport (DPP) can be applied to both countable physical objects (e.g., batteries, textiles, machines, spare parts) and uncountable substances (e.g., grain, powder, powder, fluids). In the latter case, the DPP traces the provenance, aggregation, and transformation of raw materials into a product, even for fluids and abstract substances such as electricity.

The Digital Product Passport for e-fuels serves as a crucial component of an authentic e-fuels supply chain. It captures and securely stores verifiable information about the e-fuel’s renewable energy origin, production process, and environmental impact.

With the help of DPPs, supply chain actors can validate e-fuel provenance, ensuring the integrity of the e-fuel market and promoting the adoption of genuinely sustainable energy sources as well as zero-carbon transport.

8. Call for Action: Building the Digital Backbone for Authentic e-Fuels Together

The transition to a sustainable and zero-carbon future relies heavily on the authenticity and transparency of the renewable energy supply chain. Establishing a robust digital backbone for authentic e-fuels and the verification of claims for all supply chain actors is a challenging yet vital endeavor. Considering the significant lead time of 5–7 years to develop such a backbone, it is crucial to start laying the groundwork now.

At Spherity, we specialize in digital identity, Digital Product Passports (DPPs), digital backbones for compliance use cases, and trust frameworks in the pharma, energy, and transport sectors. Our expertise and experience enable us to play a pivotal role in building the digital infrastructure needed for authentic e-fuels.

We invite stakeholders, industry leaders, and innovators to join us in collaborating on this vital mission to develop a secure and transparent e-fuel supply chain. By working together, we can drive the adoption of sustainable energy sources and contribute to a cleaner, greener future. Reach out to us at Spherity to explore how we can collaborate on e-fuels and create lasting, positive change for generations to come.

9. Conclusion

The path toward a sustainable energy future relies heavily on the authenticity and transparency of the renewable energy supply chain. Ensuring the provenance of e-fuels and their renewable energy sources is a critical aspect of this endeavor.

Given this potential, the development of a digital backbone and Verifiable Digital Product Passport (DPP) for e-fuels and green hydrogen is an essential undertaking. To ensure timely large-scale adoption, it is imperative to initiate these activities now, laying the groundwork for a sustainable and transparent e-fuel market in the future.

By implementing robust digital infrastructure, trust frameworks, and verifiable digital product passports, we can create a reliable system that allows supply chain actors to verify the origins, production processes, and environmental impact of e-fuels. This, in turn, will foster trust in the e-fuel market, drive the adoption of sustainable energy sources, and contribute to a cleaner, greener future.

References[1] Götz, M., Lefebvre, J., Mörs, F., McDaniel Koch, A., Graf, F., Bajohr, S., Reimert, R., & Kolb, T. (2016). “Renewable Power-to-Gas: A technological and economic review.” Renewable Energy, 85, 1371–1390. https://doi.org/10.1016/j.renene.2015.07.066

This review article provides an overview of Power-to-Gas technology, which is a critical component of the e-fuel supply chain, as it focuses on hydrogen production and fuel synthesis.

[2] Varone, A., & Ferrari, M. (2015). “Power to liquid and power to gas: An option for the German Energiewende.” Renewable and Sustainable Energy Reviews, 45, 207–218. https://doi.org/10.1016/j.rser.2015.01.049

This paper explores Power-to-Liquid (PtL) and Power-to-Gas (PtG) technologies as options for the German Energiewende, discussing various aspects of the e-fuel supply chain, including renewable energy integration, hydrogen production, and fuel synthesis.

[3] Fasihi, M., Breyer, C., & Bogdanov, D. (2021). The role of synthetic fuels for a carbon-neutral transport sector. Nature Climate Change, 11(4), 302–308. https://doi.org/10.1038/s41558-021-01020-0

This paper investigates the potential of synthetic fuels (e-fuels) in achieving a carbon-neutral transport sector. They argue that due to high energy requirements and costs, e-fuels should be reserved for hard-to-decarbonize sectors, like aviation and shipping, rather than widespread use in passenger cars, where battery-electric vehicles are more efficient.

[4] Catena-X Verein (2022). “Catena-X Operating Model Whitepaper. Release V2–21.11.2022. The first open and collaborative data ecosystem.” https://catena-x.net/fileadmin/user_upload/Publikationen_und_WhitePaper_des_Vereins/CX_Operating_Model_Whitepaper_02_12_22.pdf

The Catena-X operating model provides a trust framework an, open data space approach for the automotive industry’s future, enabling a data-driven value chain for all participants. It connects end-to-end value chains, ensuring equal opportunities, data sovereignty, policy compliance, and no lock-in effects. This facilitates sustainable digitalization of value chains, including small and medium-sized companies and those transitioning to zero-carbon and circularity while ensuring compliant collaboration among competitors.