Future of E-Fuels
Tied to Strategic Metals

The Institute for Applied Ecology, the Öko-Institut e.V., published a short study on the climate protection potential of e-fuelsin May 2020. E-fuels are synthetic fuels produced from water and CO² using electricity. Basically, the document written by Peter Kasten deals with the question of whether and under what conditions e-fuels can be a viable alternative for fossil fuels (petrol, diesel, kerosene).

What Owners of Strategic Raw Materials Need to Know

Two aspects of the study are of particular interest to owners of strategic raw materials:

If the CO² required for the production of the e-fuel is extracted from the air, e-fuels are climate neutral, as the same amount of CO² is bound in the fuel, that is later released when burned. In order to be able to speak of a truly environmentally friendly solution, the high electricity consumption in the production of e-fuel must be covered with renewable energy sources . As Peter Ilg explains in DIE ZEITon March 7th this year: “For massive amounts of e-fuels, you would also need wind turbines and photovoltaics en masse.” (our translation) This means neodymium, praseodymium, dysprosium, terbium but also tellurium and gallium are important raw materials if e-fuel is to be successful.

Equally exciting is that the study by the Institute of Applied Ecology does not assume that rare earths will be replaced in the future. Instead, the institute stresses that extraction processes should be redesigned sustainably. “Similar to other future technologies, the prerequisite for sustainable production of e-fuels is to understand the supply chains for the materials used and to enforce high environmental and social standards in the extraction of the necessary raw materials” (Kasten, 27). Rare earths and climate protection are therefore not generally seen as incompatible here.

Whether all these aspects become relevant depends on climate policy and other factors. But if the e-fuel comes, the demand for strategic raw materials is likely to increase.