Rich in sun or wind? Here’s how your country can export renewables

Green e-methanol is the ideal basis for a variety of alternative fuels and chemical compounds concentrated in universal e-Fuel hubs, according to Siemens Energy innovation expert Ireneusz Pyc. The idea, known for some time, has now become economically viable with costs for renewable power generation continuing to fall and new climate change policies.


By Marc Engelhardt

Energy Stories: Your monthly dose of what's up in the energy transition

Subscribe to this newsletter

Download the white paper on Power-to-X

Green e-Hydrogen is key to a carbon-free future. Find all you need to know on latest Power-to-X solutions and use cases for industries, utilities and project developers – with prime examples on how it all works.

Although based on complex research that won George Olah a Nobel Prize in Chemistry in 1994, the idea for universal e-Fuel hubs is fairly simple. Produce carbon-neutral methanol – or “green” methanol – in places that have favorable wind and solar conditions and unavoidable carbon dioxide emissions. Then store the green methanol at e-Fuel hubs where it’s either processed or shipped to market.


Universal e-Fuel hubs based on green methanol can lead to immediate large-scale carbon reductions and long-term carbon neutrality. This is the conviction of Ireneusz Pyc, Manager of Technology and Innovation at Siemens Energy. The engineer, who holds a PhD from Aachen’s renowned RWTH University, believes that the liquid synthesized from hydrogen and carbon dioxide is perfect for creating e-Fuel hubs because it opens itself up to a range of alternative fuels. “Green methanol,” says Pyc, “can become a new export commodity, comparable to oil and other hydrocarbons today.”

The benefits of green methanol

Green methanol can be used directly as a fuel for the shipping industry or converted into a number of other e-Fuels, including e-Gasoline, e-Diesel and e-Kerosene. It can also be used in refineries and the chemical industry, which makes it the e-Fuel par excellence, according to Pyc, and the ideal platform to serve diverse industry branches.


Unlike with green hydrogen, hubs based on green methanol would benefit from important synergies. For example, existing transport infrastructure such as ships, terminals and pipelines could be used with little or no alterations. And the same is true for infrastructure such as storage facilities, tanks, gas stations and vehicles fueled, partly or completely, with methanol. Green methanol can also be blended with conventional fossil fuels to create immediate carbon reductions and help monetize renewable energy sources in developing economies anywhere in the world. 

Power-to-Liquid: synthesis dynamics that match renewables

To create green methanol, hydrogen is produced through electrolysis from renewable energy sources such as wind and solar in a carbon-neutral process. The carbon dioxide is captured from plant biomass or from unavoidable sources of emissions like cement production that would otherwise be released unused into the atmosphere. This “reuse” or recycling of carbon dioxide molecules results in a net savings of around 50 percent of emissions. Both components are then transformed into methanol using Power-to-Liquid processes based on a well-established, nearly hundred-year-old method of alcohol synthesis combined with a new and innovative catalyst technology.


Already green methanol can be produced today for around 0.6 euros per liter, green gasoline (derived from this methanol) for less than 1.5 euros per liter. With declining electricity prices and electrolysis costs, plus improved processes and technology, the price would match that of “black” hydrocarbon-based fuels at the gas station – that is, if e-Fuels weren’t also taxed. This is why Pyc would like to see further political regulation that favors carbon-neutral, methanol-based fuels over their fossil-based counterparts. Equally important is the development of projects for major plants producing green methanol, which would be the heart of any e-Fuel hub. Lessons could be learned from a first pilot plant in Iceland and another currently being constructed by Siemens Energy and partners in Hassfurt, Germany. “It’s important to show that the synthesis of methanol can be done in a dynamic process that matches the volatile nature of renewable energy sources – and on a big scale,” says Pyc. Only then can universal e-Fuel hubs become reality.

" Green methanol can become a new export commodity, comparable to oil and other hydrocarbons today. "
Ireneusz Pyc, Manager Technology and Innovation at Siemens Energy 

The business case: cost, shipping and regulation

According to Pyc, the case for investment and business is strong. For one, energy and hydrogen from renewable sources have never been as cheap as today and the need to switch to green fuels never as urgent. And whereas hydrogen could be used in some markets, in developing and emerging markets without an infrastructure already in place switching to hydrogen as a fuel will probably be too costly, creating an even larger demand for more versatile alternative fuels based on methanol.


In some industrialized nations, while battery-driven vehicles or hydrogen-powered fuel cells might emerge as an alternative form of transportation over the next decades, methanol-based e-Fuels could already be used now as a bridge. The decarbonization of planes, ships and heavy trucks will also depend on green e-Fuels, requiring adequate fuel production and stations. And the 100 million tons of black methanol currently used in industry and refineries could be greened once universal e-Fuel hubs are available.


The time to act is now. Regulations like the European Union’s Renewable Energy Directive II (RED II) or the Fuel Quality Directive (FQD), which requires a 6 percent reduction of greenhouse gas intensity in transport fuels by 2020, cannot be met by bioethanol alone and carry the risk for penalties of up to 500 euros per ton of carbon equivalent.

Building a “methanol economy”

In the 1990s the Nobel laureate chemist George Olah coined the term “methanol economy,” but only today, says Pyc, is such an economy both economically valid and environmentally friendly. While Olah had wanted to replace hydrocarbons with synthetic alcohol, reducing emissions wasn’t the primary goal. Today, however, there is a real, unique chance to replace fossil fuels – black hydrocarbons – with green synthetic alcohol and its derivatives. “What’s needed now is a major investment of 1 to 2 billion dollars to build the first e-Fuel hub and show the idea can be scaled.” Pyc isn’t the only one who sees the huge potential in e-Fuels based on green methanol: The German Energy Agency (dena) expects costs to continue sinking for Power-to-X technology and methanol production in particular, and the World Energy Council (WEC) has identified the best locations and partners for project development.


Critics might point to the low efficiency of e-Fuels compared to electric cars, but Pyc doesn’t share their view. “In the end, cost is the critical factor: There are regions in the world with more than enough space for renewable energy sources, and if we can use these spaces to build hubs that can fuel the world, the cost of methanol-based e-Fuels will be low no matter the efficiency.” 

Click here and subscribe to our Energy Stories Newsletter to catch up on trends and technologies that shape the energy transition.

July 1, 2020

Marc Engelhardt reports from Geneva on the United Nations, international organizations and global developments in economics, science, politics and energy. His work has appeared in a number of media outlets, including the Neue Züricher Zeitung, ARD and Die Zeit


Combined picture credits: Getty images, Jens Amende, Siemens Energy