
Making waves
Low carbon fuels as enablers for a decarbonised mobility and transport sector
Henna Poikolainen
Guy Skantze
In the effort to address climate change and reduce greenhouse gas emissions, the mobility and transport sector is at a pivotal point. As a major contributor to global CO₂ emissions, this sector requires substantial transformation to achieve a sustainable and low-carbon future.
Imagine a world where you can travel from one place to another, without worrying about the impact of your transport on the climate and the environment. A world where you can choose from a variety of low-carbon and zero-emission vehicles, powered by clean and renewable fuels that are affordable, efficient and convenient. A world where you can breathe fresh air, enjoy the natural scenery, and contribute to global efforts to limit the temperature rise to well below 2° C, preferably to 1.5° C, as agreed in the Paris Agreement. Sounds too good to be true, right?
The vision is not impossible, but it requires a radical transformation of the mobility and transport sector, which is one of the major contributors to greenhouse gas (GHG) emissions and climate change. According to the International Energy Agency (IEA), the sector accounted for 24% of global CO₂ emissions from fuel combustion in 2019 and is expected to grow by 60% by 2050 under current policies. In this article, we will explore some of the low-carbon fuels that can enable this transformation and the challenges and opportunities they present for the decarbonisation of the mobility and transport sector.
Low-carbon fuels as enablers for decarbonisation
Low-carbon fuels have a lower carbon intensity than conventional fossil fuels, such as petrol, diesel, and jet fuel. Carbon intensity is the amount of CO₂ emitted per unit of energy delivered. Low-carbon fuels can help reduce GHG emissions from the mobility and transport sector by replacing or blending with fossil fuels, improving fuel efficiency, and enabling the use of renewable energy sources. Some of the main low-carbon fuels are electricity, hydrogen, biofuels, e-fuels, and natural gas.
“I strongly believe in the decarbonisation of the transportations sector. To meet the Paris Agreement, all available renewable fuel options must be used. Preem is going through the biggest transition in the company’s history, from being a producer of fossil transportation fuels to being a producer and provider of biofuels, EV charging and e-fuels. Going into the future, we are also broadening our product offerings, supplying low carbon fuels to the aviation and marine sectors.”
Magnus Heimburg, President & CEO of Preem AB
Electrification - powering the future of transportation
Electricity is the most widely used low-carbon alternative for the mobility and transport sector, especially for light-duty vehicles, such as cars, vans, and motorcycles. Because of the high energy efficiency, lower noise and air pollution as well as lower operating and maintenance costs, we should electrify everything we can – and only then consider alternative low-carbon fuels.
However, EVs still face high upfront costs, finite raw materials, developing charging infrastructure, limited battery performance, and recycling, and the electricity grid does not qualify as “low carbon” in many regions of the world. Therefore, the adoption of EVs depends on the availability and affordability of new vehicles, the development, and deployment of fast and smart charging stations, the improvement and innovation of battery technologies, and the decarbonisation of the electricity supply.
Hydrogen – zero-emission fuel
Similarly to electrification, hydrogen has a superior advantage compared to other low carbon fuels; Burning hydrogen in fuel cells or internal combustion engines does not generate any tailpipe emissions. However, the life-cycle emissions are dependent whether the hydrogen is produced from natural gas, biomass, or water and electricity.
The uptake of hydrogen depends on the scaling up and cost reduction of low-carbon hydrogen production, the development and expansion of hydrogen infrastructure and vehicles, and the improvement and harmonisation of hydrogen safety and quality.
Biofuels – a green alternative for existing fleet
Biofuels are derived from biomass, such as plants, animals, microorganisms, and organic waste. They are classified into different categories, depending on the feedstock, production process, and fuel quality. Biofuels can enhance fuel security, and rural development, and are essential to reach Net Zero – they are needed to decarbonise existing f leet in road, aviation, and maritime sectors.
Biofuel feedstocks are heavily regulated to derisk land and water use, the food vs fuel debate, and biodiversity loss. Therefore, the development and deployment of biofuels depend on the availability of sustainable feedstocks – particularly wastes and residues - the advancement and optimisation of biofuel technologies, and the optimisation of carbon intensity throughout the supply chain from farms to aircraft engines.
E-fuels - synthetic solutions for a low-carbon future
E-fuels are synthetic fuels produced from abundant resources: renewable electricity, water, and CO₂ captured either from the atmosphere or industrial sources. E-fuels include a variety of different fuel types such as e-gasoline, e-diesel, e-kerosene, e-methane, e-methanol, and e-ammonia. However, they are not yet a competitive fuel option due to high production costs and low energy efficiency.
The feasibility of e-fuels relies on the improvement and scaling of e-fuel technologies, integration and coordination of e-fuel value chains, availability and affordability of low-carbon electricity and CO₂, and market mechanisms supporting premium pricing.
Natural gas - a bridge to a low-carbon future
Natural gas is a fossil fuel that consists mainly of methane and can be used as a low-carbon fuel, especially for heavy-duty trucks and in shipping.
Natural gas can be used in compressed (CNG) or liquefied (LNG) form and can be blended with biomethane or e-methane to reduce its carbon intensity. Natural gas has lower GHG emissions than diesel and petrol, lower air pollution, lower noise, and lower fuel costs. Whether natural gas is a transition fuel, or a long-term option depends on the fleet development, mitigation of methane leakage, and the transition to renewable methane
Energy demand between fuel types in different transport modes, EU-27

“All ships need to be sustainable by 2050, but before then, over 100,000 operational ships need to change their fuel or energy source. We at Liquid Wind, a leading developer of e-fuel production facilities, are seeing a very strong push from shipping companies and their customers to develop green shipping and decarbonise supply chains. The majority of the world’s trade is transported by sea, generating 3% of global greenhouse gas emissions according to UNCTAD. This is largely driven by the fact that 98.2% of the world’s operational transport fleet still runs on conventional fossil fuels. The shipping industry must decarbonise to meet the International Maritime Organisation’s (IMO) 2050 Net-Zero targets, and Liquid Wind offers a key solution to replace carbon intensive maritime fossil fuels with low-carbon e-fuel, in turn facilitating the decarbonisation of global shipping.”
Claes Fredriksson, CEO of Liquid Wind
Carbon intensity, abatement costs and total cost of ownership as key metrics to assess the competitiveness of low-carbon fuels
Low-carbon fuels are not all created equal. They have different advantages and disadvantages depending on the type, source, production process, distribution system, end use, and disposal method. So, how can we compare and choose the best low-carbon fuel option for each sector and mode of transport?
The first key metric is carbon intensity. To ensure fair comparison, there are strict sustainability criteria and calculation methods on how GHG emissions of different fuels should be evaluated. Same feedstock is treated differently whether grown on arable or severely degraded land.
Abatement costs, measured in terms of EUR/USD per tonne of CO₂ saved, consider both carbon intensity and costs of the fuel. Low-carbon fuels are rarely priced against production costs, but rather against the marginal mean of abatement in each market.
Total cost of ownership (TCO), taking into account investment costs, maintenance, and fuel costs during the entire lifetime of a vehicle, is used not only to compare alternative engine types but also as a price setting mechanism for alternative low-carbon fuels. Claes Fredriksson, CEO of Liquid Wind Carbon intensity, abatement costs and total cost of ownership as key metrics to assess the competitiveness of low-carbon fuels Low-carbon fuels are not all created equal. They have different advantages and disadvantages depending on the type, source, production process, distribution system, end use, and disposal method. So, how can we compare and choose the best low-carbon fuel option for each sector and mode of transport? The first key metric is carbon intensity. To ensure fair comparison, there are strict sustainability criteria and calculation methods on how GHG emissions of Total cost of ownership assessment is particularly useful for heavy-duty road and maritime transport, where there are multiple options for low-carbon fuels.
Low-carbon fuels are essential for the decarbonisation of the mobility and transport sector, as they can help reduce GHG emissions and reliance on fossil fuels, while improving fuel efficiency and environmental quality. However, low-carbon fuels are not a silver bullet. It is important to use the right metrics to assess the impact of each fuel option and to choose the most suitable one for each sector and mode of transport. By doing so, we can achieve a sustainable and resilient mobility and transport sector that can meet the needs of society while protecting the planet and its resources.

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