25 February 2019

Study: Synthetic energy sources - perspectives for the German economy and international trade

Following the Paris Climate Protection Agreement in 2015, the European Union have set themselves ambitious targets for reducing greenhouse gas emissions ("GHG"). Liquid synthetic fuels from renewable energies can play a big role for the transport sector. Liquid fuels have to be used in aviation, in shipping and in road freight vehicles using internal combustion engines. All types of renewable fuels will be needed to reach the ambitious targets set by the UN and the EU. Synthetic energy sources from renewable electricity – known as “power-to-liquids” or “power-to-gas” – will help to deal with this situation. In the study, prepared by frontier economics and the IW (Institut der deutschen Wirtschaft), relevant aspects of the import and worldwide trade of synthetic fuels produced from renewable energies were examined.

The Report showed that the growing global market for renewable fuels, increasingly will supply both the mineral oil and natural gas markets. These renewable fuels will be blended into fossil fuels to reduce their carbon content. This will have a very positive impact on the German economy and potential partner countries. The global use of synthetic fuels generates great opportunities for Germany as a technology supplier. Estimates of the additional “value creation” of using renewable fuels shows that up to 36,4 billion Euro per year and up to 470.000 new jobs by 2050 will be generated.

Synthetic fuels can create development potential for producer countries and promote international cooperation.

In summary, it can be stated that “synthetic fuels should be part of the international energy and climate change agenda”.

Materials for download:

The full version of the study

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