What if the CO₂ coming out of chimneys wasn't waste but a raw material? What if we could "recycle" it into fuel for planes and ships, or into plastics and building materials? That's the idea behind converting CO₂ into fuels, the so-called e-fuels, and more broadly behind carbon capture and utilisation (CCU).
It sounds like a magic solution. It isn't, but for some sectors it may become essential. Let's look at how it works, where it's already in use, what it costs and when it genuinely helps the climate.
CCU vs CCS: what's the difference?
Both technologies start the same way: they capture CO₂, either from industrial flue gas or directly from the air (Direct Air Capture). The difference is what happens next:
- CCS (carbon capture and storage): the CO₂ is stored permanently in geological formations deep underground.
- CCU (carbon capture and utilisation): the CO₂ becomes a feedstock for fuels, chemicals or materials.
CCU has one big advantage: it makes something you can sell, so it can pay for part of its own cost. It also has a catch, which we'll come to: if the product is burned, the CO₂ goes back into the atmosphere.
How CO₂ becomes fuel
The CO₂ molecule is very stable. Turning it into fuel takes two things: hydrogen and energy. The main route is called CO₂ hydrogenation:
- Capture CO₂ from an industrial source or from the air.
- Produce green hydrogen by electrolysing water with power from solar or wind.
- Catalytic reaction: CO₂ and H₂ react over a catalyst to make methanol, methane or hydrocarbons.
The most mature reaction is methanol synthesis: CO₂ + 3H₂ → CH₃OH + H₂O. It uses copper and zinc oxide catalysts, similar to those the industry has used for decades, typically at around 200–300°C and high pressure. For liquid fuels such as e-kerosene, CO₂ is first converted into carbon monoxide and then into long hydrocarbon chains through the Fischer–Tropsch process.
Research into new catalysts, nanostructured with more active sites, aims for reactions at lower temperatures and pressures, with fewer by-products and longer lifetimes. Many promising results are still at lab scale, though, and moving to industrial scale is the real test.
What CO₂ can become: the main options
| Product | Use | How long the CO₂ stays locked up | Maturity |
|---|---|---|---|
| e-methanol | Shipping fuel, chemical feedstock | Briefly, if burned as fuel | First commercial plants |
| e-kerosene (e-SAF) | Aviation | Briefly, released in flight | Pilot stage |
| e-methane | Gas grids, industry | Briefly, if burned | Demonstration and early commercial |
| Polymers / plastics | Materials industry | Years to decades | Early commercial |
| Building materials (concrete, aggregates) | Construction | Permanently, as mineralised carbonate | Commercial at small scale |
From the lab to the market: real-world examples
- Iceland: Carbon Recycling International's "George Olah" plant has produced renewable methanol from CO₂ and hydrogen since 2012, using geothermal energy.
- China: much larger plants using the same technology now recycle CO₂ from industrial gases.
- Chile: the Haru Oni pilot project produces synthetic petrol using wind power, with backing from carmaker Porsche.
- Shipping: major container lines are already building methanol-fuelled ships, which can run on green e-methanol.
- Concrete: companies inject CO₂ into fresh concrete, where it mineralises and stays locked up permanently.
When CCU genuinely helps the climate
Honesty is needed here. When an e-fuel is burned, the CO₂ goes back into the atmosphere. So the climate benefit depends on three conditions:
- Where the CO₂ comes from: if it comes from the air or from biogenic sources, the cycle can be close to neutral. If it comes from fossil fuels, the best case is that it gets "used twice" before ending up in the atmosphere.
- Where the energy comes from: the hydrogen must be made with renewable energy. With fossil power, the result can be worse than simply using the fossil fuel.
- Where it's used: making e-fuels loses a large share of the original energy. A car running on e-fuel needs several times more renewable electricity than an electric car for the same distance. That's why e-fuels make most sense where direct electrification is very hard: aviation, shipping and the chemical industry.
The right way to measure this is a life cycle assessment (LCA), which counts all emissions from capture to final use.
Costs and policy: what will decide success
Today, e-fuels cost several times more than fossil fuels. Most of the cost is green hydrogen, so cheap renewable power and cheaper electrolysers are the key. Three factors will decide how fast costs fall:
- The carbon price: the more emissions cost under the EU ETS, the more competitive synthetic fuels become.
- Mandates: the ReFuelEU Aviation regulation requires EU airports to supply rising shares of sustainable aviation fuel, with a specific minimum share of synthetic fuels from 2030. FuelEU Maritime pushes shipping in the same direction.
- Funding: tools such as the EU Innovation Fund, European Hydrogen Bank auctions and carbon contracts for difference reduce investment risk.
Frequently asked questions
Are e-fuels carbon neutral?
They can be close to neutral if the CO₂ comes from the air or from biogenic sources and the hydrogen is made with renewable energy. Otherwise, the benefit is small or zero.
Will cars run on e-fuels?
Technically they can, but it's far less efficient than using the electricity directly in an electric car. E-fuels are expected to be used mainly in planes and ships.
What's the difference between e-fuels and biofuels?
Biofuels are made from biomass (crops, waste, used cooking oil). E-fuels are made synthetically from CO₂ and hydrogen using electricity, so they don't need farmland.
Is CCU better than CCS?
They serve different purposes. CCS stores CO₂ permanently; CCU puts it to use. For fuels, the CO₂ returns to the atmosphere, while in building materials it can stay locked up for good. See how new materials are improving capture in our article on MOFs for CO₂ capture.
The takeaway
Turning CO₂ into fuel won't save the climate on its own, and it shouldn't become an excuse to keep emitting. But for planes, ships and the chemical industry, where batteries aren't enough, e-fuels may be one of the few realistic options. Their success will depend on cheap renewable power, green hydrogen and the right policies.
Do you think e-fuels are the future of aviation and shipping? Share this article and your view, and check our CO₂ Term Glossary for the terms you came across.