E-fuel Market Size, Share & Trends Analysis Report By Product, By State (Liquid, Gas), By Production Method, By Technology, By End-use, By Carbon Source, By Carbon Capture Type, By Region, And Segment Forecasts, 2023 - 2050

Report Overview

The global e-fuel market size was estimated at USD 113.94 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 19.0% from 2023 to 2050. This growth is attributed to the growing demand for clean and sustainable e-fuels to reduce the dependence of countries on fossil fuels, which are major contributors to climate change and air pollution. COVID-19 has had a mixed impact on the growth of the renewable fuel market across the world. The pandemic negatively affected the demand for e-fuels such as e-diesel, e-kerosene, e-methanol, and others as a result of the economic downturn and disruptions in supply chains. Several industries, such as automobile and aviation, witnessed a decline in demand for their offerings. This, in turn, decreased the global demand for e-fuels used in these industries.

The U.S. is among the early adopters of clean energy solutions in the world for sectors such as power generation and transportation. This can be attributed to the increased importance given to clean energy solutions as per the Energy Act introduced by the U.S. government in 2005.

For instance, the Clean Fuels & Products Shot, an essential initiative undertaken by the U.S. Department of Energy's Energy Earthshots program, focuses on transforming the fuel and chemical industries. The primary goal of this initiative is to shift toward renewable fuels and its innovative technologies, aiming to significantly reduce industry-related greenhouse gas emissions by 85% by 2035.

Product Insights

Based on product, the market has been segmented into e-diesel, e-gasoline, ethanol, hydrogen (green hydrogen), e-kerosene, e-methane, e-methanol, and others. Among these, the ethanol segment accounted for the largest share of over 26.0% in 2022 in terms of revenue. This is attributed to several government policies and investments taking place across the globe to scale up its production. For instance, the fuel blending requirements of the Renewable Fuel Standard Program in the U.S. promote the use and production of renewable ethanol in the country.

The e-kerosene segment is expected to expand at the second fastest CAGR of 56.3% over the forecast period 2023-2050. This can be attributed to several initiatives undertaken in Europe to increase its production. For instance, starting in 2025, aircraft departing from European airports will need to use more sustainable aviation fuels (SAFs) such as e-kerosene for refueling. These regulations for increased blending have been given the green light by the European Commission (EC).

State Insights

Based on the state, the e-fuel market has been categorized into liquid and gas. Among these, the liquid state segment accounted for the largest market share of over 78.0% in 2022 in terms of revenue and is expected to retain its position in the market over the forecast period. This growth is owing to the wide application of these liquid e-fuels in powering vehicles, powering generators, and industrial operations, all without the need for major adjustments to existing setups.

The gas state segment is expected to expand at the fastest CAGR of 20.0% over the forecast period 2023-2050. This growth is attributed to its wide application in sectors with significant dependence on gaseous fuels, including power generation and heating. This adaptability extends to their integration within the established gas infrastructure.

Production Method Insights

Based on production method, the market for e-fuel is further segmented into power-to-liquid, power-to-gas, gas-to-liquid, and biologically derived fuels. Among these, the power-to-liquid segment accounted for the largest share of over 34.0% in the production method segment in 2022 in terms of revenue. This growth is due to its sustainable approach to producing sustainable liquid e-fuels, utilizing renewable energy, and addressing environmental concerns related to conventional fuels.

The gas-to-liquid segment is expected to expand at the fastest CAGR of 19.7% over the forecast period 2023-2050. Gas-to-Liquid (GTL) technology is a transformative production method that converts gases like natural gas or syngas into liquid hydrocarbons through Fischer-Tropsch synthesis. This method involves utilizing the initial gas feedstock such as natural gas or syngas obtained from processes like gasification, which contributes to the growth of this segment.

Technology Insights

Based on the technology, the market for e-fuel is further categorized into hydrogen technology (electrolysis), fischer-tropsch, and reverse-water-gas-shift technologies. Among these, the hydrogen technology segment accounted for the largest share of over 58.0% in 2022 in terms of revenue. This technology is witnessing significant growth as it is a reliable method for generating hydrogen without carbon emissions, using renewable and nuclear sources. Polymer electrolyte membranes (PEM) and alkaline electrolyzers are the types of hydrogen technology (Electrolysis) technologies used to generate renewable fuels.

The reverse-water-gas-shift segment is expected to grow at the fastest CAGR of 21.1% over the forecast period 2023-2050. This market growth is attributed to its ability to produce carbon monoxide utilizing renewable hydrogen and captured carbon dioxide, thereby reducing dependence on carbon sources derived from fossil fuels.

Carbon Source Insights

Based on carbon source, the e-fuel industry is further categorized into point source and direct air capture. Among these, the point source segment accounted for the largest share of over 81.0% in the carbon source segment in 2022. This growth is owing to its ability to capture emissions from industrial sites or processes emitting greenhouse gases and carbon dioxide into the atmosphere.

The direct air capture segment is expected to expand at the fastest CAGR of 19.5% over the forecast period. This growth is attributed to the method involving specialized facilities known as DAC plants, which are designed to directly draw CO2 from the surrounding air. These plants use advanced technologies to capture and condense CO2 molecules from the atmosphere.

Carbon Capture Type Insights

Based on carbon capture type, the market for e-fuel is further segmented into post-combustion and pre-combustion. Among these, the pre-combustion segment accounted for the largest share of over 68.0% in 2022. This is owing to its common application in the gasification process, where the initial carbon-containing material is transformed into a gas-type mixture containing hydrogen and CO2.

The post-combustion segment is expected to expand at the fastest CAGR of 19.3% during the forecast period. This market growth is owing to its application in industrial facilities such as power plants and factories. This method separates CO2 from the mixture of gases released during combustion. Innovative technologies like chemical solvents or absorbents are often used to separate carbon dioxide from these gases.

End-use Insights

Based on the end-use, the e-fuel market is further segmented into automotive, marine, industrial, railway, aviation, and others. Among these, the automotive segment accounted for the largest revenue share of over 28.0% in 2022. This is because e-fuels, such as e-diesel and e-gasoline, seamlessly replace conventional petroleum-based fuels in regular internal combustion engines, making it possible for automakers to adopt them without extensive modifications.

The others segment comprising the agriculture industry, is expected to expand at the fastest CAGR of 21.7% during the forecast period 2023-2050. This is due to e-fuels derived from renewable resources having the potential to serve as an alternative to conventional fossil fuels in agricultural equipment like tractors, harvesters, and transportation vehicles.

Regional Insights

Europe accounted for the largest market share of over 46.0% in the market in 2022 in terms of revenue and is expected to witness significant growth over the forecast period 2023 to 2050. This market growth is owing to supportive government policies taking place in the region, such as the Renewable Energy Directive (RED II), which mandated the utilization of e-fuels, such as e-diesel and e-kerosene, in the transportation industry.

Germany held the largest market share of over 21.0% in 2022 as the country has been actively supporting to scale up the production and utilization of e-fuels in the country by investing in the development and production of renewable fuels. For instance, in May 2022, the government of the country announced an investment of USD 12.5 billion to promote the utilization of renewable fuels in India under the Joint Declaration of Intent (JDI) on the Green and Sustainable Development Partnership.

North America is expected to expand at the fastest CAGR of 19.8% during the forecast period owing to significant support from the federal government of the countries. Countries such as the U.S. and Canada provide substantial funds for pilot-scale projects to aid advancements in research & development for renewable fuel technologies. The increased implementation of stringent rules to minimize greenhouse gas emissions and boost knowledge about clean energy in countries such as the U.S. and Canada is expected to drive the market in the region over the forecast period.

Key Companies & Market Share Insights

The market features various global and regional players, which makes it a competitive market. The world’s leading companies are using collaborations, partnerships, agreements, mergers, and acquisitions as strategies to withstand the intense competition and increase their market share. E-fuel producers are spending extensively on research & development activities to develop advanced products and integrate new technologies and characteristics to conserve energy and improve efficiency.

In April 2023, Norsk e-fuel collaborated with Norwegian Air Shuttle ASA to build a new e-fuel production facility in Northern Norway. This new plant aims to produce sustainable e-fuels catering to the aviation industry by 2026. With this collaboration, the company is expected to scale up the production of e-fuel to cater to the aviation industry. Some of the prominent players operating in the global e-fuel market are:

• Archer Daniels Midland Co.

• Ballard Power Systems, Inc.

• Ceres Power Holding Plc

• Clean Fuels Alliance America

• Climeworks AG

• E-Fuel Corporation

• eFuel Pacific Limited

• Hexagon Agility

• Neste

• Norsk e-Fuel AS

E-fuel Market Report Scope

Global E-fuel Market Report Segmentation

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2050. For this study, Grand View Research has segmented the global e-fuel market report based on product, state, production method, technology, end-use, carbon source, carbon capture type, and region:

• Product Outlook (Revenue, USD Million, 2018 - 2050)

  • E-Diesel

  • E-Gasoline

  • Ethanol

  • Hydrogen

  • E-Kerosene

  • E-Methane

  • E-Methanol

  • Others

• State Outlook (Revenue, USD Million, 2018 - 2050)

  • Liquid

  • Gas

• Production Method Outlook (Revenue, USD Million, 2018 - 2050)

  • Power-to-Liquid

  • Power-to-Gas

  • Gas-to-Liquid

  • Biologically derived fuels

• Technology Outlook (Revenue, USD Million, 2018 - 2050)

  • Hydrogen technology (Electrolysis)

  • Fischer-Tropsch

  • Reverse-Water-Gas-Shift (RWGS)

• End-use Outlook (Revenue, USD Million, 2018 - 2050)

  • Automotive

  • Marine

  • Industrial

  • Railway

  • Aviation

  • Others

• Carbon Source Outlook (Revenue, USD Million, 2018 - 2050)

  • Point Source

    • Smokestack

    • Gas Well

  • Direct Air Capture

• Carbon Capture Type Outlook (Revenue, USD Million, 2018 - 2050)

  • Post-combustion

  • Pre-combustion

• Regional Outlook (Revenue, USD Million, 2018 - 2050)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Netherlands

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

    • Russia

  • Asia Pacific

    • China

    • Indonesia

    • Thailand

    • India

    • Japan

    • South Korea

    • Australia      

  • Central & South America  

    • Brazil

    • Argentina

  • Middle East & Africa

    • Saudi Arabia

    • UAE

    • South Africa