Make France right now a European champion of e-fuels to decarbonize industry and heavy mobility

The 2024 edition of the French e-fuels Observatory lists nearly 26 publicly announced projects, including 16 industrial-scale projects with a total of 1,028 ktoe of projected production capacity (equivalent to 11.4 TWh of e-fuels). On a like-for-like basis, the volume of announced project capacity has risen by 38% since the July 2023 edition. French players are thus confirming their optimism in the industrialization of e-fuels. However, public support is still needed to secure initial investments. 17 departments in 8 of France's 13 metropolitan regions host at least 1 project. The e-fuels sector represents a structuring industrial challenge for the host regions, particularly those that have historically focused on the petrochemical industry and need to begin their transition. The projects are almost entirely focused on decarbonizing aviation (e-kerosene projects representing 426 ktoe, excluding co-products) and the maritime sector (300 ktoe of e-methanol projects). This prioritization confirms the role of e-fuels in decarbonizing sectors that are difficult to electrify. The technological building blocks have reached an advanced stage of maturity. However, their integrated combination in processes still poses challenges for the emergence of efficient synthesis routes. European institutions have set targets for the incorporation of renewable, low-carbon hydrogen and its derivatives in industry and transport. The aviation sector is particularly concerned, with a target of 1.2% renewable, low-carbon e-fuels by 2030 and 5% by 2035. Failing the development of domestic e-fuels production facilities, France will have to import e-fuels to meet its regulatory obligations. In the aviation sector, the amounts at stake could represent Euros 2.6 billion in 2035 if no domestic production of e-kerosene develops. Completion of the first projects would enable France to produce more than it needs in the short term, giving it the opportunity to export its production and know-how, and contribute to achieving its neighbors' targets. By 2040, France would no longer be self-sufficient for its needs without new projects. Completion of all projects would avoid the emission of 2.4 to 3.4 Mt of CO₂ per year, depending on the energy mix used to power the various stages of the e-fuels value chain. Based on the French electricity mix forecast for 2030, the emissions avoided would be 2.7 MtCO₂/year. The owners of 10 projects representing 40% of production capacity (excluding co-products) anticipate the creation of 3,705 permanent jobs, either directly or indirectly, particularly in areas where the conversion of the industry is at stake in the context of the energy transition. If implemented, the various projects mapped out will require 24 TWh of electricity from renewable or nuclear sources, representing 3.4% of the low-carbon electricity production capacity provided for in France's energy-climate strategy, implying a major effort to deploy renewable energies. These low-carbon electricity requirements are significantly higher than those estimated in the energy scenarios currently being considered by the relevant organizations. A dialogue between the stakeholders concerned must continue on these decisive issues. The projects studied will require 2.6 Mt of CO₂/year, i.e. 2.2% of the current volume produced by sites >30 ktCO₂/year, and 10% of their biogenic CO₂ volume. The ability to mobilize these sources is an issue, given the non-eligibility of fossil CO₂ after 2040 for the production of low-carbon e-fuels. The need for water should not be an obstacle to project deployment. Nevertheless, good practices will need to be adopted by all players to minimize the water impact of the sector. The stakes involved must be assessed on a case-by-case basis, taking into account the specific features of each project. Securing business models is key to triggering projects with CAPEX close to Euro billion. State support and a framework providing clarity on the evolution of the market environment are desirable. The Delegated Acts on the definition of low-carbon hydrogen are awaited in this sense