Oil producers are not being serious about investing in “genuinely clean fuels” such as green hydrogen, and are instead devoting most of their investments in alternative fuels to “unsustainable” biofuels and blue hydrogen, according to a new report from Brussels-based non-profit organisation Transport & Environment (T&E).
The study says that of the sector’s €38.7bn ($41.6bn) of planned investments in alternative fuels, €28bn is being ploughed into biofuels, with €6.5bn going towards blue hydrogen (derived from fossil gas with carbon capture and storage), and just €3.3bn for green H2 and derivatives. These include e-fuels such as green methanol or e-kerosene that are expected to become carbon-neutral fuels for shipping and aviation.
And just €900m is due to be spent on replacing the grey hydrogen used in oil refining with the green variety.
“Oil producers are promoting hydrogen as their big bet for the future, but in reality their investments in green hydrogen are pitiful,” said Geert Decock, electricity and energy manager at T&E. “Instead, they are focusing their new refining capacity on biofuels which cannot sustainably supply the world’s transport needs. This is not an industry pushing the boundaries of clean technology.
“Where oil producers are investing in hydrogen, most is going towards replacing dirty grey hydrogen operations with blue hydrogen, which still uses polluting fossil gas. Instead of wasting their time on easy, short-term solutions, oil refiners should switch to producing green hydrogen and e-fuels for ships and planes today.”
According to T&E, “a rapid scaling up of the production of e-fuels suitable for aviation and shipping is the only option to fully decarbonise these transport modes by 2050”.
“However, the current focus by oil suppliers to use renewable hydrogen in their refineries will prolong reliance on fossil fuels in these sectors,” it added.
The campaign group says that the biofuel plans “come with significant sustainability risks”, pointing out that the planned capacity for production of hydrotreated vegetable oil-based biofuel will require four times as much feedstock as can be sustainably supplied in the EU, which would require “dubious” used cooking oil to be imported from overseas.
“Despite the ongoing hype about hydrogen, refiners are not jumping on the bandwagon yet,” said T&E. “This is unfortunate, as there are many opportunities and synergies between conventional refining and e-fuels production.
“A strong mandate for e-fuels production will be necessary to get refiners investing in e-fuels for the hard-to-abate transport sectors like aviation and shipping.”
