The transition to sustainable fuels is an essential element of global climate strategies, yet significant challenges remain. A recent study, conducted as part of the INNOFUELS project funded by Germany’s Federal Ministry for Digital and Transport (BMDV), sheds light on the market barriers hindering the development and scaling of synthetic fuels such as Power-to-Liquid (PtL) and biofuels.

Study Approach and Objectives

The research employed a Delphi method, a structured expert survey, to gather perspectives from a broad range of stakeholders. Conducted between December 2023 and January 2024, this first phase (Delphi 1) aimed to identify market and regulatory hurdles across the value chain of synthetic fuels. Key focus areas included resource availability, investment, regulatory frameworks, and market structures.

Key Findings

The study highlighted several critical barriers:

1. Resource Availability: Challenges were noted in securing sufficient renewable energy and CO₂ resources for production.

2. Investment Deficits: Many participants cited insufficient investment in infrastructure and innovative technologies, such as Sun-to-Liquid processes and biogas plants, as significant bottlenecks.

3. Regulatory Frameworks: Regulatory inconsistencies and lengthy approval processes were frequently mentioned as barriers to market growth.

4. Market Structures: The lack of a coordinated strategy for scaling the PtL and biofuel markets was identified. Many stakeholders highlighted fragmented value chains and unclear market roles.

5. Standards and Certification: Missing or inconsistent standards for production and use were seen as obstacles, particularly for ensuring cross-sector compatibility and fostering trust among investors.

6. Environmental Considerations: While negative ecological impacts were generally not considered significant, concerns about long-term effects, such as resource competition, were noted.

Next Steps

This initial phase of the study serves as a foundation for further analysis. Two additional Delphi phases are planned to:

• Investigate root causes of the identified barriers (Delphi 2).

• Develop actionable solutions to address these challenges (Delphi 3).

Conclusion

The findings confirm SPIN’s own findings and our policy analysis conducted as part of the joint market analysis with CGES. They underline the complexity of scaling Power-to-Liquid and biofuels in a market environment that lacks cohesion and sufficient support. Addressing regulatory, investment, and coordination challenges will be crucial to unlocking the potential of these sustainable fuels and accelerating the transition toward climate-neutral mobility.

Source: INNOFUELS project report, “Delphi 1 Study on Market Barriers for Power-to-Liquid and Biofuels,” June 2024.