Synthetic fuels mitigate the risks associated with rapid end-use technology transition in climate mitigation scenarios

Abstract

In recent years, synthetic fuels have been identified as a potential measure for decarbonization of hard-to-abate sectors. Due to the high production costs associated with solar and wind power-based hydrogen production and carbon capture, previous research has indicated that the role of synthetic fuels may be restricted to specific sectors such as aviation. However, the high compatibility of these fuels with fossil fuel-based end-use technologies could support decarbonization while mitigating the risks associated with end-use technology transition, which has yet to be addressed in the literature. This study aims to quantify the role of synthetic fuels in the rapid end-use technology transition using an energy system model. To achieve this aim, we evaluated three indicators: the shares of electricity and hydrogen in final energy consumption, stranded investment, and the number of international energy transport vessels. The results suggest that synthetic fuel use can moderate the rapid transition to electricity and hydrogen utilization technologies, enabling decarbonization while avoiding the premature retirement of existing fossil fuel-based technologies. We conclude that the benefits of retaining fossil fuel-based end-use technologies must be weighed against the losses incurred due to the irrationality of using synthetic fuels over cheaper options.