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By Robert Rapier on Apr 30, 2015 with 44 responses

Is Audi’s Carbon-Neutral Diesel a Game-Changer?


Occasionally I am deluged with inquiries about a particular news story. That happened this week. As the inquiries mounted, I decided I better address the story. After I saw one more gushing, uncritical report on CNN, I knew a reality check was in order.

This week German car manufacturer Audi announced they can economically produce carbon-neutral automotive fuel from ingredients found in the atmosphere:

Audi has successfully made diesel fuel from carbon dioxide and water

That article’s subtitle is “Carbon-neutral diesel is now a reality.” The article explains:

German car manufacturer Audi has reportedly invented a carbon-neutral diesel fuel, made solely from water, carbon dioxide and renewable energy sources. And the crystal clear ‘e-diesel’ is already being used to power the Audi A8 owned by the country’s Federal Minister of Education and Research, Johanna Wanka.

There is also an explanatory graphic that goes along with the story, and that’s where a few people might begin to ask some critical questions about this process:


Many people have already suspected that there has to be a catch. Of course there is. This process requires carbon dioxide to be captured from the air, and hydrogen to be produced from electrolysis. It is true that the atmosphere — nitrogen, oxygen, water vapor, carbon dioxide — contains all of the ingredients necessary to make all sorts of unimaginable things. The raw ingredients are there for fertilizer, pharmaceuticals, plastics, and certainly fuel. But the key ingredients, carbon dioxide and water, are the products of combustion. Burning diesel creates carbon dioxide and water. Converting them back into diesel takes a lot of energy.

Think of fuel as a rock at the top of a hill. It has a lot of potential energy. Roll the rock down the hill and that potential energy is released. This is similar to burning fuel to create carbon dioxide and water. Now, if you want to turn that carbon dioxide and water back into fuel, you have to carry the rock back up the hill. That takes energy. How much? According to the laws of thermodynamics, it always takes more energy to carry that rock up the hill than you get from rolling it back down. In other words, the process is necessarily an energy sink. It is a dead certainty that more energy is required to produce this fuel than can be released by burning the fuel.

But is that a problem? It depends. If you have a readily available and cheap energy source, it could make sense to produce fuel via a process that is an energy sink. Imagine for a moment that we have a process that uses nothing more than the sun’s energy to crack water into hydrogen, which we can then burn for fuel (and which converts the hydrogen back into water in the process). Yes, this would be an energy sink, but one using a nearly limitless source of energy. And if the value of the hydrogen is greater than the cost of the inputs, this may be a worthwhile process despite the fact that it is an energy sink.

This is essentially the claim being made by Audi. By invoking “ecological power generation”, Audi is claiming that they can produce the fuel in a way that is cost effective and carbon neutral. So let’s look at their economics. The article states that they will sell to the public between 1 and 1.50 Euros per liter, “dependent on the cost of renewable electricity.” Diesel in Europe is currently about 1.50 Euros per liter, which works out to be $6.37 US dollars per gallon at the current conversion rate.

At this point I am going to need to get a little bit technical, so I will partition this section for those who don’t care about technical things. If this is you, you can jump right over this section to the conclusions. Despite the fact that I can say with certainty that this is an energy sink, I don’t really know how much it will cost to produce the fuel. I suspect more than what Audi suggests, but let’s find out.

The Economics of the Process

In order to produce 1 ton of fuel, this process reportedly requires (link is dead; this is the company supplying the carbon dioxide capture technology) capture of 3.2 tons of carbon dioxide. That in turn requires 200-300 kilowatt hours (kWh) of electricity and 1,500 to 2,000 kWh of thermal energy per ton of carbon dioxide. In my experience, the high end of these ranges is generally more representative of actual operations, while the lower end represents projections and best case scenarios of much larger projects. But let’s use the midpoint of both for the analysis.

The average price of electricity for industrial users in the U.S. is currently 6.9 cents per kWh. (It’s much higher for residential and commercial users). In the European Union prices are quite a bit higher than that. The most recent data showed an average price of 0.123 Euros per kWh in the EU, which is 14 cents per kWh at the current exchange rate. In Germany, where Audi is based, the cost of electricity is about 16 cents per kWh.

If we use the lowest cost here — the price for industrial users in the U.S. — then the cost of the electricity to capture the carbon dioxide is 3.2 tons * 250 kWh * $0.069 = $55.20 per ton of fuel produced. This is also $17.25 per ton of carbon dioxide captured, which is much lower than other numbers I have seen — especially considering they are proposing to extract the carbon dioxide from air.

The cost of the thermal energy — which is steam as noted by the inlet temperature of 105°C and an outlet temperature of 95°C — is dependent upon the fuel cost. Presumably this thermal energy is for shifting carbon dioxide into carbon monoxide via the water-gas shift reaction, which is required for the fuel synthesis reaction as described below. (Note: If this is how they are producing the carbon monoxide, it could significantly increase the hydrogen requirement that I calculated below). The average of the given range is 1,750 kWh of thermal energy per ton of carbon dioxide. This is equivalent to 6 million British thermal units (MMBtu) (almost exactly the energy content of a barrel of oil). Boilers are about 85% efficient at converting natural gas to steam, so the cost of the thermal energy at $4/million BTU natural gas would be around 3.2 * $4.00 * 6 / 0.85 = $90.35 per ton of fuel produced. Like electricity, natural gas costs in Europe would be significantly higher.

The other main ingredient in the process is hydrogen. They don’t indicate how much hydrogen is required, but they do indicate they are utilizing the Fischer-Tropsch reaction, which has the formula:

(2n+1) H2 + n CO → CnH (2n+2) + n H2O.

Don’t worry, it’s not as complicated as it looks. The “n” represents the length of the carbon chain to be built. If we take a 12-carbon chain length as representative of diesel fuel (which is right in the range of diesel length hydrocarbons) then the reaction becomes:

25 H2 + 12 CO → C12H26 + 12 H2O

Therefore, we can calculate the theoretical minimum of how much hydrogen this reaction is going to require per ton of fuel produced. If we convert all units of weight into units of molecular mass, we can solve the rest of the equation. C12H26 has a density of 0.7495 grams (g) per milliliter (mL) and a molecular weight of 170.3 grams (g) per mole. Thus, 1 (metric) ton of fuel would be equal to 1,000 kilograms (kg) * 1 liter/(0.7495 kg) = 1,334 liters, or 352 gallons.

A ton of fuel contains 1,000 kg * 1,000 g/kg * 1 mole/170.3 g = 5,872 moles of C12H26. We can cross-check our calculations by noting that this much C12H26 contains 70,464 moles of carbon (i.e., 5,872 * 12). In comparison, the 3.2 tons of carbon dioxide they stated is required per ton of fuel contains 72,727 moles of carbon; only 3% off based on our assumption of C12 as the fuel. So the calculation based on my assumption of C12H26 as representative of the fuel is internally consistent.

To produce a ton of fuel per the reaction above is going to require 5,872 moles C12H26 * 25 moles of H2 per mole of C12H26 = 147,000 moles of H2. Hydrogen is very light, with a molecular weight of 2 grams per mole, so this converts to 294,000 grams, or 294 kilograms of hydrogen. How much might that cost?

This is where they make some assumptions that may not hold up well over time. They assume they will use wind and solar power to produce the hydrogen, and that this can be cheaply done. But the U.S. government has done a highly detailed Hydrogen Production Cost Analysis in which they estimate the costs of hydrogen production from wind and solar power across many locations in the U.S. While the Department of Energy has a 2015 goal of producing hydrogen from renewable energy at a centralized site for $3.10/kg and for distributed hydrogen at $3.70/kg, they concluded that no sites could presently achieve this target. They calculated that base hydrogen costs (i.e., no distribution) ranged from $3.74/kg to $5.86/kg. So that helps us to factor in the cost of hydrogen into this analysis.

If we assume the low end of the projected production costs of about $4/kg of hydrogen produced, production of 1 ton of fuel will require 294 kg * $4/kg = $1,176 in hydrogen. Add that to the $55.20 for the electricity required to capture the carbon dioxide and the $90.35 in thermal energy per ton of fuel, and the primary raw materials cost $1,322 per ton of fuel. As noted earlier, a ton of fuel would contain about 352 gallons, so this means the raw materials will cost — based on the assumptions made here which are based on data that have been released — about $3.76 per gallon of diesel produced. The vast majority of that cost is due to the hydrogen, so the assumptions made about hydrogen production are where the greatest sensitivity to price will be.

It is also possible, as noted earlier, that if they are using the standard water-gas shift reaction to convert carbon dioxide into carbon monoxide, their hydrogen requirement could be around 50% higher. That would add another $1.67/gal to the raw material cost for a total of $5.43/gal. In any case, the process economics are dominated by the cost of producing hydrogen.

Keep in mind that these are only the costs for the primary feedstock inputs. They don’t include the cost of capital recovery, nor do they include operating and maintenance costs. These can easily add several more dollars per gallon to the costs. The article anticipates that “the e-diesel will sell to the public for between 1 and 1.50 Euros per litre.” This converts to between $4.24/gal to $6.37/gal. While the lower end of this range appears to be overly optimistic, the upper range may be achievable keeping in mind that we have made some very generous assumptions regarding their process. Notably, cheaper U.S. prices were used for key inputs. On the flip side, the current spot price of diesel in the U.S. is under $2/gal.


To sum up, can Audi produce fuel from thin air? Sure. There is no question about technical viability. However, they are also not the first to make this claim. In 2012 I wrote an article called Investors Beware of Fuel from Thin Air in which I examined very similar claims from a company called Air Fuel Synthesis. The question boils down to economic viability, which appears to be challenging given what has been released about the process.

Also keep in mind that Audi has only done this process at very small scale. These projections were based on lab scale experiments. Audi has now scaled the process to 160 liters per day, which is about 1 barrel per day. They will now gather data at this scale, and either firm up or contradict some of their assumptions about the process. If everything works as hoped, they will then need to scale up again to something in the 100 to 1,000 barrel per day range. These scale-up steps are like gates that must be successfully passed, and historically most seemingly promising processes fail to pass through those gates for various reasons. As a result, one should never take too seriously a cost estimate for fuel production from a commercial plant when the data is derived from experiments at a much smaller scale.

It is important to note that because this process is an energy sink, it could exacerbate carbon dioxide emissions. The reason they are claiming it doesn’t is because they are assuming little to no carbon emissions from the inputs. That’s why the graphic stipulates that the electricity comes “entirely from renewable energy sources.” It will certainly be difficult to run a plant continuously on intermittent energy inputs, but any fossil fuel inputs into the plant will have their carbon dioxide emissions magnified. To understand this, consider that it may take 2 or 3 BTUs of energy input for each BTU of energy output. You could possibly pull that off in an environmentally-friendly way with 3 BTUs of solar power input and 1 BTU of diesel output, but if you use natural gas instead, then that 1 BTU of diesel output may generate the emissions from 3 BTUs of natural gas input. In a case like that, it would be better to use that fossil fuel input directly in an engine (if possible) than to utilize it to produce a fuel in a process that is an energy sink.

So, circling back to the claim that “carbon-neutral diesel is now a reality” — I think most would agree that projections of what a process will look like after it has been scaled up 2 more times don’t constitute reality. They constitute a vision of reality. This claim is no more accurate than if I were to say “Colonies on Mars are now a reality.”

Finally, please note that the analysis here isn’t meant to demean the work that has been and continues to be done. I consider this very worthwhile and fascinating research. I am simply attempting to offer a more complete and realistic perspective in light of the uncritical reports by the mainstream media.

Link to Original Article: Is Audi’s Carbon-Neutral Diesel a Game-Changer?

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)

  1. By Palloy on May 1, 2015 at 2:49 am

    Interesting analysis. It seems a bit odd you should mix costs/values in US$ and Euros.
    If you did the calculation by spreadsheet, you could have separate columns for both sets of costs, and low and high versions of each too, and then compare results side by side.

    • By Robert Rapier on May 1, 2015 at 3:35 am

      The reason for that is that the reports from Audi were all based in Euros, but Euros per liter isn’t going to resonate at all with U.S. readers. They know dollars per gallon, so there are reference points in there for Americans and Europeans.

  2. By Gath Gealaich on May 1, 2015 at 5:31 am

    Isn’t there a lot of carbon dioxide more easily separable from biogas? Germany should be able to separate more than 1 Mt of CO2 annually from biogas, where it is much more highly concentrated. Ditto for the exhaust of some types of power plants.

    The costs for hydrogen seems to be dominant, though. But I’m not sure if applying US prices for hydrogen production to the German environment makes sense.

    • By Robert Rapier on May 1, 2015 at 10:46 am

      The hydrogen would be produced in the same way as the analysis by NREL that I cited. The costs will be dominated by the cost of producing power. The cost to produce wind power in Germany should be in the ballpark of what it is in the U.S., so I think that analysis would be valid. In fact, NREL did the analysis for locations across the U.S. to come up with that range. I think conditions in Germany will fall into the range that NREL estimated.

      • By Ofer Imanuel on July 26, 2015 at 11:07 pm

        I think the whole mechanism makes sense under very specific conditions. Electric cars have much less energy waste, but have limited range due to battery technology. Cars fueled by natural gas are less heavy on carbon production and cleaner environmentally. To do better than that, it will make more sense to first retire the natural gas turbines (after all coal is replaced with solar, wind and nuclear).
        At that point, I would assume that our carbon production will be handled by trees.

  3. By George Harvey on May 1, 2015 at 6:18 am

    I think a simple analysis could be off on the economics because of the market fluctuations in the wholesale price of power. Hydrogen production can be started and stopped very easily to take advantage of the least costly power available. That being the case, it could be used as a resource to help balance the grid, and should qualify for wholesale prices on the same basis as pumped storage. German wholesale power prices occasionally go negative. The average price of power for making hydrogen could be very low. In theory, it could even be negative.

    • By Gath Gealaich on May 1, 2015 at 6:43 am

      Those events will certainly become more frequent in the future. There’s also continuous push to squash the capital and operating costs for the necessary equipment way lower.

  4. By Forrest on May 1, 2015 at 7:54 am

    Audi spin on the fuel reminds me of wind energy proponents who claim their energy is free. I was expecting a outrageous comparison, but as the posts below, with factor of waste hydrogen and oil selling north of $100 the fuel starts to compete. A lot of research directed to hydrolysis providing a much needed energy storage. Catalysis research claim a 50% improvement. Remote and off grid hydro and wind may come into play with hydrogen production. Same with low load power. Nuclear and coal research is targeting hydrogen production with results. I read an analysis of best zone for alternative diesel fuel for military was the conversion of ethanol. The ethanol industry already within production and very cost efficient. Technology exists for conversion. Problem is the high cost as compared to traditional diesel, but in an emergency or critical shortage the option is a nice backup.

  5. By Ryan on May 1, 2015 at 9:39 am

    The issue here is effeciency. The 70% figure they cited was from (clean energy) power plug to gas tank. Once it hits the tank, you lose at least half of the energy again, since diesels are around 45% effecient from tank to wheels. Total effeciency from plug to wheels is around 30%.
    You’d be better off going electric, since they’re around 90% from plug to wheels. Assuming you’re using clean energy for both, you’ll need one third the amount of solar or wind generation for an electric car than an e diesel. Makes a big difference.

    • By Forrest on May 1, 2015 at 11:44 am

      But well to wheel or life cycle analysis of real grid power positions BEV not that far from diesel hybrid. Natural gas fuel is the darling fuel for future of grid, yet life cycle analysis positions the fuel best used within hybrid CNG vehicle as opposed to powering the grid for transportation. Beside the CNGV is 30% cheaper for vehicle ownership costs. Go one further and compare cellulosic E85 and the optimized Cummins E85 engine. They developed the engine for medium duty vans that surpasses grid efficiency (well to wheels) and factor in easy refuel, lower cost engine, lighter car, and more mpg than gasoline and no more expensive than diesel. All of this, without hybrid technology and with a ultra low carbon rating and emissions. No expensive infrastructure change required.

      • By T-Wizzle on May 31, 2015 at 11:57 am

        Making CNG available to retail customers will require expensive infrastructure. Would like to see a comparison of building hundreds of CNG stations vs hundreds of high voltage electric stations.

        • By Forrest on June 1, 2015 at 7:08 am

          DOE claims $1.2-$1.8 million per large retail gas station for CNG. Motorist could refuel within same time span as normal gasoline fill. Compare that cost to adding E15. Most stations would suffer $1,000 expense. When factoring in infrastructure costs, ethanol alternative fuel looks very good. Hydrogen infrastructure even more expensive. Battery power would require ubiquitous charge stations as owners would need to plug in every parking spot. Think of the range anxiety for BEV owners that need to routinely calculate trip, route, charging stations, time as the cost of error very misfortunate. Charging times can vary from 20 hrs for 15 mile range to 1 hr for 10-20 mile range. This is not practical transportation. Consider we could easily put 50% more alternative fuel in the fuel supply and bust the bogus blend wall and save consumers money. What should be Environmentalist 1st priority? Understand the fuel market is run by a few International Corporations. How tough would it be for wind to enter the grid market if the competition all but a few well connected International Corps?

          • By T-Wizzle on June 8, 2015 at 11:30 am

            Ethanol has less potential energy than gasoline it essentially dilutes gasoline. It also produced with corn that has varying degrees of sustainability. Most importantly it increases the cost of corn which raises the cost food b/c corn is a major feedstock in protein production.
            As for range anxiety, 98% of all daily round-trips are < 50 miles. The mean daily trip is 6 miles. A car with a 100 mile battery will be sufficient for the vast majority of all trips. Most drivers will make their daily commutes on overnight charges from home. People will get use to charging their cars like they charge their smartphones.

            • By Forrest on June 9, 2015 at 7:51 am

              Ethanol is required per law to help gasoline pollute less. The fuel is attractive per low cost improvement to gasoline per the octane and better fuel character. Combustion engineers are doing a better job exploiting ethanol character. I was listening to “Under the Hood” national auto show and surprised to learn, gone are the days of FFV losing 30% mileage. Modern vehicles lose 10%-15%. I did notice my wife’s Focus doesn’t lose any mileage up to E30. Its not a flex fuel car, but runs better with the mix. Combustion engineers claim E30 would be perfect fuel for modern high efficiency engines as the mix would allow less GHG emissions, high efficiency, and no loss in mileage. Cummings actually has a truck engine that beats gasoline mileage with E85 fuel. Do you know the most unhealthy components of gasoline displaced when using higher blends of ethanol. Oh, the food canard has been proven wrong. Loss of farm income and increase cost of fuel or energy the limiting factor of food production which ethanol helps reduce. Food production is highly dependent on argonomics, science, productivity, good practices, and ability to pay for all of it. Thank you ethanol.

  6. By TimC on May 1, 2015 at 12:12 pm

    The first sentence of the linked ScienceAlert article says, “German car manufacturer Audi has reportedly invented a carbon-neutral diesel fuel, made solely from water, carbon dioxide and renewable energy sources.” Where is the inventive step here? All of the chemistry and engineering in the described process have been around for decades, some for more than a century.

    It’s also worth pointing out that there are many possible variations on the process that Audi describes. For one example, instead of producing “Blue Crude” (aka FT liquids) the conversion reactor could convert H2 and CO2 to methanol. The methanol could then be converted to gasoline (MTG). Or, the methanol could be converted to acetic acid, and the acetic acid converted to ethanol (eg Celanese TCX). There is no end to the fuels and oxygenates that could be produced from CO2 and H2, all using well-known chemistry that has already been demonstrated at commercial scale. Audi is not doing anything new here.

    • By Robert Rapier on May 1, 2015 at 5:51 pm

      Agreed that there are no new steps as far as I can see, which is why the media have gotten totally carried away in my opinion. I have lost track now of the headlines that claim that this is a new invention that creates fuel from “air and water”, leaving out the very important ingredient “energy.”

    • By InauguralArmageddon . on September 14, 2015 at 1:08 pm

      The exciting part is the potential investment from large companies such as Audi.

  7. By Sam Geckler on May 1, 2015 at 12:59 pm

    If I could ask anything it would be a similar comparison to “competitive” solar based options (I consider wind=solar, since without the sun…no wind). For example, the Sandia Sunshine-to-Petrol program (thermochemical), or the European Solar Jet Project. Do they all end up between $5-10 per gallon? They are not all at the same development status, but are all working the same conceptual problem.

    • By Robert Rapier on May 1, 2015 at 5:50 pm

      That NREL study claimed to be for solar and wind, but all the numbers I saw referred to wind calculations. I wanted to see some solar electrolysis numbers.

  8. By Russ Finley on May 2, 2015 at 12:41 am

    From the CNN article:

    Just imagine being able to tear around the countryside in an Audi sportscar, and not having to feel guilty for all the CO2 emissions you’re producing. We can’t wait.

    Are they planning to build their refinery next to a large wind farm and send everyone home when the wind stops blowing? Might be smarter to build it next to a nuclear power plant ; )

  9. By Forrest on May 2, 2015 at 6:51 am

    Nuclear research includes high temperature steam hydrolysis. Coal gasification research attempting to utilize the large hydrogen generation stream for fuel cell or storage. Ethanol brewing generating a pure CO2 waste stream. Consider Stanford News research: “Using nickel and iron, which are cheap materials, we were able to make the electrocatalysts active enough to split water at room temperature with a single 1.5-volt battery,” said Hongjie Dai, a professor of chemistry at Stanford. “This is the first time anyone has used non-precious metal catalysts to split water at a voltage that low. It’s quite remarkable, because normally you need expensive metals, like platinum or iridium, to achieve that voltage.”

    This is a buzz feed just to show the pieces may be falling together and that scientist are making inroads. I don’t think we can say with certainty that old paradigms of cost calculation will always stand.

  10. By Forrest on May 2, 2015 at 8:05 am

    Maybe Robert could cover this in future? I was reading a supply chain consultant’s management blog. The bog has an interesting take per his core concern. He has one of the best explanations and supply problems of the -bobs gasoline supply. He claims the vehicle fleet will convert to natural gas. It is not so much if, as when. Another variable upon fuel sector. Watch the turf battle between EPA, Health, and Energy departments. EPA has full control over fuel sector, but that power looks to be waning. Public has maximum concern of health, in which the EPA is not well adapted to. They are air, water, and earth people. GW is prime concern as opposed to cancer rate. Energy department has better solutions to energy problem as compared. For example the EPA seems obsessed with control of every CO2 molecule and not so much within the scope of cost or overall pollution stream IOW they are very impracticable within real world concerns and value to realistically improve environment. They also are highly motivated per bureaucracy growth per the usual bandwidth of control freaks. They will only condone solutions whereupon they can easily test in process results. They hate low cost biological solutions for this reason and focus on pushing industry and engineering solutions which put them in drivers seat. They don’t like to mess with voting public that would quickly vote them out of power. The recent concern of inflammatory gut disease, leaky gut disease, inflammation in general has become a modern day phenomena. That health research is laying the blame to gluten or modern farming practices. But, the most recent concerns lie within micro particles. It seams EPA concerns upon pollution may have inadvertently maximized the health problems of air quality. They have relatively crude benchmarks that they guard per Gestopo like gusto conformance and chose to avoid the difficult to ascertain concerns of health. By pushing diesel in particular they inadvertently maximized these engines to produce invisible micro particles that shoot right through the normal biological air cleaning abilities of people. The particles enter blood stream directly and may be the actual culprit to the modern day auto immune diseases. Carcinogens of normal tail pipe emissions seem to be of little concern to EPA clean earth department as well. Citizens are more concerned for their own health and when the dust settles the health department may have more power. Personally, if it is an energy source the Energy Department should be in control with input from the other two as the Energy Department can orchestrate a economic balance that would serve the consumer best. The other two seem to have zero ability to compromise per cost. Maybe the Audi green diesel solutions emits no micro particles? That value may zoom in near future.

  11. By Advocatus Diaboli on May 2, 2015 at 6:23 pm


    Thanks for the analysis. Insightful, as usual. You have been focussing on the cost of the fuel, but I wonder whether you could elaborate on the carbon claim.

    The cost is one thing, but being “carbon-neutral” is quite another. I would think that having truly carbon-neutral fuel would be a steal at twice the price they quote, and I would gladly settle for more. My concern is that the carbon-cost is certainly not as they state it (it cannot be carbon-neutral at the moment), and there is no reason to believe that it is any lower than that of conventional fuel. I am not saying that it is not, but they do not produce any convincing evidence.

    It cannot be “carbon-neutral” because all its inputs are heavily dependent on fossil fuels. That is certainly the case for the capital stock (from windmills to refinery). Moreover, even if they used only “renewble” energy for the process, there are big question marks how that can be taken into account. If they just “buy” that power from other producers, then it almost certainly has an opportunity cost in fossil energy. I.e., if they did not use it, someone else would, and there would be less fossil energy produced. In other words, the production of this energy-intensive fuel would add to the overall energy demand, and marginal energy production is not entirely renewable (not even in Germany), and even the renewable bit has a carbon cost (at the very least in capex, but we should also other factors, not the least that much of the renewable capacity is bioenergy, and most bioenergy is at least as carbon-intensive as the fossil fuel they replace).

    Another option is if they produce their own renewable power. That would arguably eliminate the opportunity cost of fossil energy, but would almost certainly make the financial cost much higher (and would still retain the carbon cost of buiding up and maintaining the renewables fleet if solar/wind, and also the running cost if bioenergy).

    The overall carbon cost could still be lower than that of conventional fossil fulel (and I do hope it is) but I have some doubts. The doubts come from the high energy cost you mention, and that the energy system, overall, is still based on fossil sources. Even if they manage to make the energy mix needed for this fuel “cleaner” than the average, they cannot make it fully clean, and the savings (par unit energy) will at least be partly offset by the higer energy demand.

    Any views?

    • By Robert Rapier on May 2, 2015 at 6:30 pm

      “It cannot be “carbon-neutral” because all its inputs are heavily dependent on fossil fuels.”

      That is absolutely correct, and I almost went into that. But I decided it was already long enough that this would just add another layer on. Even if the wind power is “renewable” it isn’t totally carbon neutral. So just using wind power doesn’t make the fuel carbon neutral.

      There are also a number of things that could drive the costs much higher than what I have calculated here. In reality, the cost for renewable electricity in Germany is around 3 times the number I used.

      • By Advocatus Diaboli on May 3, 2015 at 8:30 am

        Thanks Robert,
        I think it is just as important (if not more) to get carbon right than to get cost right. This is because it is largely the hope of getting emissions down that motivates the whole exercise and the (inflated) claims. Also, prices are largely artificial (e.g., the mentioned fuel pruces include a considerable policy-driven tax content) and other factors are also driven by (often incorrect) assumptuons about carbon. E.g, someone mentioned that CO2 could be collected from biofuel plants. This is correct, but ignores that biofuel plants exist solely due to subsidy and that the subsidies are justified by (seriously inflated) claims on carbon and that biofuels themselves are heavily fossil-depent (even the official numbers do not consider them C-neutral). So we are dealng with an environment increasingly driven by false claims on C, which is good neither for the climat, nor for the economy.

  12. By Forrest on May 3, 2015 at 5:06 am

    Interesting they claim diesel achieves 70% thermal. Being experts within the field I would guess they have a good measure. That’s roughly twice the energy per gallon per enhanced fuel character. So, $6.50/g e-diesel now competes with $3.25 fossil diesel. Attach, environmental benefits to cost? How, about the financial assessment utilizing pure waste stream CO2 from the ethanol process. Present condition a black mark on ethanol for carbon rating, that could be utilized in this process. Free CO2 with attached environmental win. The steam energy could be easily achieved per CHP aka waste heat. Higher steam temps achieve lower Kwh usage that may play into the economics. Same with promising electrode metallurgy R&D that achieves more efficiency within the electrolysis process. The electrolysis process as describes reversible, so they apparently have power storage concerns for intermittent power. But as comments have disclosed it matters not attaching the device to renewable energy as this energy source has many demands upon the grid. There is no benefit for example commandeering all hydro to increase E-diesel green rating, rob Peter to pay Paul.

    • By Forrest on May 4, 2015 at 7:22 am

      My mistake after reading the companies news release realized “Blue Diesel” has a 70% system efficiency (not the Blue diesel engine). The fuel has better fuel character for efficient combustion improving cetane from pure diesel 40 to 70. This will push higher diesel engine efficiency and quiet the engine down. The fuel has no sulfur or fossil oil, so emission will drop sharply. The process core utilizes solid oxide electrolysis rated most promising of the hydrogen generators. It’s a high temp fuel cell process that reduces power consumption. Heat sources of concentrated solar and geothermal attracting interest. Audi has a reversible process that will be attractive for power storage needs. It’s an intriguing solution to fit within our current fuel and power systems. Liquid fuels well entrenched and offer max benefit to motoring public. Diesel fuel has high energy storage for long range trips with low weight load. Easy and quick to refuel and zero cost of infrastructure changeover and blue diesel may have low pollution. The process has environmental benefit of converting CO2, ethanol has this benefit as well. Power storage interest as attractive as utilizing hydrogen for synthetic fuel. If ever cost effective, the solution much simpler than fuel cell car or battery car.

      • By InauguralArmageddon . on September 14, 2015 at 1:01 pm

        My biggest concern regarding ethanol is that it relies on growing crops. With estimates that between 35-40% of earths non ice covered land is already used for agriculture; and now large swathes of African savannah being bought up for agricultural use, bio-fuels are only going to exacerbate the current land crisis. Biofuels will only fuel another crisis against biodiversity; as they demand the destruction of more land to be used for agriculture. Realistically we should be looking at methods to reduce the percentage of the Earth’s surface used for agricultural purposes.

        • By Forrest on September 15, 2015 at 3:33 pm

          First, were better off diversifying our fuel. Fossil fuel has little competition other than ethanol.
          U.S. for example, has not increase farm acres, even when producing more ethanol. How is that possible? Better agronomics, biogenics, and better processing. All the farm crops including corn continue to increase yield per acre. Fields are now producing to much forage per acre and the condition is limiting yield and demands increase use of nitrogen. Optimum organic matter is surpassed, with need to bale and remove a couple tons per acre. Same with straw, and sorghum. Cellulosic ethanol is the best use of this overage. That is a lot of feed stock for ethanol production.
          Poor farm soil should be converted to Miscanthus with the bonus of wildlife enjoying prairie like conditions. Nature studies have found these grasses very popular with wildlife especial adjacent to wetlands. Harvesting can be timed or managed to minimize wildlife disturbance.
          Ethanol process plants continue to improve, for example the cellulose within seed kernel is a low value component of DDG. New processes convert the matter to ethanol. That pumps up ethanol 2 billion gallons/yr without supply any more feed stock. In addition doubling the corn oil component (diesel fuel).
          Good forestry management practices produce a huge quantity of waste wood that is not particularly valuable if left alone to rot. Especially now days with concerns of methane and CO2 emissions. Western forest fires have been exacerbated by bad forest management practices. This is a huge source of feed stock for ethanol.
          Africa has much land that is not utilize much by nature or wildlife. Having islands of healthy biannual feed stocks are being studied and appear to amp up the wildlife and diversity. Natural land is not always pristine and wonderful as nature shows like to depict.

  13. By Christopher Calder on May 3, 2015 at 11:47 am

    Wind and solar are dead end technologies that will never be economic for large scale energy production. This new fuel technology must be mated with Low Energy Nuclear Reaction (LENR) and/or highly simplified hot fusion technology that does not use costly lasers. Lockheed Martin has designed a compact hot fusion reactor that can be built on assembly lines and is about the size of a 747′s jet engine. LENR technology is being developed all over the world by several dozen companies, and the first commercially installed LER reactor is running right now in factory in North Carolina for a 400 day Beta test. It has been running for months without refueling, and the fuel is nonradioactive and low in cost. Expect electricity for about one cent (US) per kilowatt hour. Google *The Fusion Revolution* for details.

    • By Jenny Sommer on May 13, 2015 at 6:01 pm

      Are you making this up on the go or do you copy past it from some.text file?

  14. By Rick on May 7, 2015 at 11:48 am

    Good article, a couple of adds. Most of the time, renewables power can displace fossil fuels. If you are using that power to produce H2 instead, the non-displaced emissions attach to the H2 – so it is only carbon neutral if there is nowhere else for the power to go.
    The €1.50 European diesel price includes a lot of tax – the true cost comparison should be with the pre-tax cost of around €0.60.

  15. By Forrest on May 14, 2015 at 9:35 am

    A couple of things. Michael Levi seems to have a good analyst of our countries future energy needs/supply. All of the current and future energy supplies have unique attributes, good and bad. Compounding the rating; international strategic security, global CO2 warming science, and energy supplies that will improve job creation. Roll that up with what Hawaii’s attempt to be 100% renewable energy within 30 years and look what they are attempting. Now, we must realize Hawaii is a perfect condition to foster alternative energy and will no doubt easily achieve the target as compared to mainland states. What are they counting on? Solar, wind, hydro, geothermal, biomass, and biofuel. Ethanol production to date hasn’t been successful within Hawaii, but may in the future. It’s very hard for them to compete with corn ethanol. True they grow a good crop of sugar cane, but that is proving to be more expensive than corn given the mechanization advantage of corn. Land prices, expensive labor, and tax burden a difficult environment to compete against imports of corn ethanol. Their best shot per current fleet of projects, would be the ultra high land efficiency of algae bio fuel of which can produce ethanol and/or biodiesel. The process requires tropic heat and sun a big plus in Hawaii. They have to be careful with wind turbine energy per the states long list of endangered bird population. Solar roof top is very successful and continues to be the optimum placement resource for the expensive solar panels. But, it is interesting they need all of the renewable energy sources that prove to be competitive. They utilize and exploit areas best suited and located within need. Biomass energy globally, for instance, has been calculated to meet 8x the energy need of citizens. But, the only successful biomass plants are located close to need and within 50 mile radius of supplies. Hawaii has some pump water energy storage and wave power projects, but we need to watch what they develop that will truly become cost efficient. They have attractive hydro power and geothermal. Hawaii will track per Michael Levi writings per the natural gas energy. The CNG resource will be quickly utilized to support developing renewable power. It will fill in the voids and shortcomings. He suggests the U.S. should scuttle coal power plants for quick environmental improvement. We have 500 years of natural gas for entire countries energy needs. At the rate of current consumption it will take 3,000 years. Heavy duty trucking will transfer to natural gas fuel. Thirty percent of nations energy spent for space and process heating needs of which biomass has much attractive benefits. Biofuel will continue to develop. Battery capability and cost will continue to develop, but mainly be utilized to increase efficiency of hybrid vehicle of which will be powered by increasing percentages of biofuel. Vehicle efficiencies will continue to improve. Nuclear is a wild card as well as hydrogen. Hydro should be developed to full extent.

  16. By Bruce Kinzinger on May 21, 2015 at 11:23 pm

    I’m not an expert in fuels. So I’m unclear about the CO in the formula, when the article mentioned CO2. I’ve heard that carbon monoxide is a fuel itself, that can be burned, so I’m guessing that the formula used is optimistic with respect to the energy required to create C12H26 compounds – true?

    • By Robert Rapier on May 22, 2015 at 10:37 am

      CO can be used as fuel, but it has very low energy density. You wouldn’t get much range. I think the Audi engineers have been very aggressive in assumptions about their energy consumption in this process. They definitely will need to put more energy in than out, and it could be a lot more than they think once they try to scale it up.

    • By TimC on June 1, 2015 at 10:37 am

      Using H2 from the electrolyzer, captured CO2 is easily converted to CO via the water-gas shift reaction: CO2 + H2 = CO + H2O. This reaction is lumped under the Conversion step of the process diagram. The CO can then be separated out by condensing the H2O, and the CO mixed with more H2 to produce fuel in the Fisher-Tropsch reaction as described in the post.

      Obviously, all of this requires a lot of H2, production of which by electrolysis would use up a lot of expensive renewable energy. The water-gas shift reaction and the Fischer-Tropsch reaction are decades-old chemistry. It has been known for a long time that this sort of “fuel from air and water” process is possible, but it has always been considered impractical due to the huge amounts of energy required.

  17. By Noboru Segura on July 6, 2015 at 3:36 pm

    Dear Robert
    One big favor: Unfortunatelly the link to Slideshare with the requirements/consumptions of the process is not available anymore (beggining of The Section Economics of the Process). Is there any way you can share complete presentation or file with me? I am searching information for a presentation for my Master Degree
    Thanks a lot for your support!

  18. By InauguralArmageddon . on July 29, 2015 at 1:14 pm

    The technology is new and will no doubt be made more efficient with investment.
    This technology should become a priority for global investment in order to try and make it a viable, economic and efficient reality.
    The biggest problem with most ‘green fuels’ is their unreliability and the inability to effectively store them. If we could turn this technology into a viable way in which to convert unreliable wind and solar energy into a liquid fuel we could capitalise on ‘free’ energy when the wind is blowing and the sun is shining by storing it as liquid fuels and use the stockpiles when less energy is being generated via these methods.

    • By TimC on July 29, 2015 at 4:09 pm

      There are more promising technologies for storage of intermittent renewable power as liquid fuels. One example is ammonia. An Iowa farmer named Jay Schmuecker, who also happens to be a retired JPL scientist, has outfitted his corn farm with 77 kW of PV panels which he uses to produce H2. He stores the H2 as ammonia, and uses the ammonia to fertilize his corn. Here’s a link:

      Ammonia is a better H storage agent than Audi’s hydrocarbons, because ambient air contains about 3,900 times more N than C. That makes it much much more energy- and capital-efficient to separate a stream of pure N2 from air than CO2.

      • By Forrest on July 31, 2015 at 9:07 am

        Thanks for the link. A lot of R&D invested into the hydrogen production per energy storage. This will make wind energy practical. Hydrolysis efficiency is improving per catalysis ability of electrode. Heat, also, utilized to boost the system efficiency. Hydrogen as I understand the base stock to do so much within energy i.e. fuel cell, ammonia, fuel, plastics. Nuclear and coal energy, also, capable within the hydrogen cycle. High temperature nuclear reaction will make the hydrolysis efficient, much more than the common steam to electric 33%. Coal fluidized bed gasification (clean coal) produces a large percentage of hydrogen gas that currently goes to combustion for steam turbine power. R&D work continues to place a heavy duty fuel cell within gas stream to convert the hydrogen directly to electricity per the extremely high efficiency conversion. Farmers whom could utilize the ever present wind power for ammonia, fuel, and electricity on the farm would receive maximum bump up in carbon rating. Interesting the bio digestor technology per the animal manure will fit nicely within this energy stream. Iogen has cellulosic ethanol technology that utilizes the biodigestor within their process. They scrub the biogas to natural gas pipeline quality for easy distribution. Interestingly, they have an process to off load same contribution of natural gas off pipeline to common hydrogen conversion process, but inject and blend the gas to gasoline and diesel fuel. Hydrogen within these fossil fuels will energize or improve the fuel much like ethanol to make them more efficient within engine. Ethanol and hydrogen make a potent combination to maximize fossil fuel efficiency. Igen is having good success within Brazil cellulosic ethanol plant production.

      • By InauguralArmageddon . on September 14, 2015 at 12:33 pm

        That’s a good point. However, it is my understanding that ammonia as a fuel has poor fuel density when compared with gasoline products (about 40% of the energy stored in petrol per litre) and would therefore require much larger storage tanks meaning it is less practical for personal transport. It is also incredibly caustic and in very small concentrations of around just 50ppm in air is harmful. For me, ammonia has too many drawbacks to become the worlds ‘mainstream’ fuel.
        I’m excited at the prospect of synthesising oil based fuels from air because it would not only maintain (or slightly reduce) atmospheric carbon dioxide, but can be practically used in so many applications because the technology used to burn it is already so mature and it can be used in all kinds of applications including large powerstations.
        Hopefully this decrease in oil prices won’t cause a loss of urgency and investment in this exciting technology. Fingers crossed it can live up to the hype.

  19. By mario c macedo on September 15, 2015 at 7:43 am

    Very interesting. But is already absolete.Wacth the Greensynfuel process

  20. By Peter Lang on January 12, 2016 at 2:54 am

    Excellent explanation. Thank you.

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