What's Going on in the E-Fuel Industry for Heavy Transport?

In a major move that's shocking the industry, Ørsted has decided to scrap its ambitious European green fuels project in Örnsköldsvik, Sweden. The project was meant to produce e-methanol to support aviation and maritime shipping decarbonization.

However, as the article notes, market conditions are much slower than anticipated, and Ørsted was reportedly incurring higher costs and facing difficulty in securing long-term contracts from fuel users.

“The business case has deteriorated during maturation due to the inability to sign long-term offtake contracts at sustainable pricing and significantly higher project costs,” said Ørsted Chief Executive Mads Nipper.

But this speaks to a broader topic. Other major players like Shell and Fortescue are also scaling back or pausing their renewable energy initiatives at a time when it's most needed. Maritime ships and the fuel they use are among the dirtiest forms of transport relative to their percentage in the transport sector.

I would imagine current economic conditions are impacting Ørsted’s decision as the company strives to focus on higher-return ventures. However, without investment in maritime shipping decarbonization, costs won't come down. Also, I am shocked to hear there is difficulty in signing offtake agreements, which leads to a broader question of what major companies are really signaling publicly versus behind the scenes when it comes to decarbonization efforts.

🔍 Key Takeaways:

1. E-Fuels Market Challenges: Slower growth and higher costs are impacting the development of alternative fuels.

2. Strategic Shifts: Companies are increasingly prioritizing projects with clearer financial returns.

3. Broader Industry Trends: Similar setbacks are affecting other renewable energy projects.

As we navigate these evolving dynamics, staying informed and adaptable will be crucial for advancing our sustainability goals.

Learn more here.

EV Charging Trends: Insights from JD Power Survey

JD Power recently conducted a survey on the current state of EV charging to identify trends and gauge consumer sentiment. The following article below covering the survey highlights some key observations that I point to later in this post.

Before that, here are some additional thoughts that I've been discussing with industry leaders lately:

1. The era of early EV adoption has come to an end.

2. Early adopters, especially non-Tesla owners, have had to endure various public charging issues that non-early adopter won't put up with.

3. The EV charging industry is thus both maturing and going through consolidation. This is partially leading to a slower adoption of EVs in this current period.

4. Looking ahead, within the next 1-2 years, public EV charging is expected to become significantly more reliable (but that might overlap with a slowdown in EV sales/adoption until charging is reliable)—thanks to the transition to NACS, improvements in non-Supercharger station reliability, expanded Supercharger access, and those charging providers who take reliability seriously ultimately winning customers.

5. This progress could trigger the next major wave of EV adoption, marked by a sharp increase in the EV adoption S-curve.

Here is the article and survey summarized (brought to you by ChatGPT):

1. Charging Infrastructure Improvements: Progress in EV charging infrastructure includes Tesla Superchargers opening up to other brands and federal funding becoming available, indicating potential for growth in the system.

2. JD Power Study Findings: According to JD Power’s Electric Vehicle Experience (EVX) Public Charging Study, overall satisfaction with DC fast charging has improved, but the situation is more complex than it seems.

3. DC Fast Charging Satisfaction: Consumer satisfaction with DC fast charging has increased to 664 out of 1,000 points, with notable improvements in reliability and speed. The opening of Tesla Superchargers to other brands has contributed to this boost.

4. Tesla Supercharging Trends: Although satisfaction with Tesla Supercharging remains high (731 points), there has been a slight decline due to increased overcrowding and the presence of non-Tesla vehicles, which has affected the exclusivity and availability for Tesla owners.

5. Level 2 Charging Decline: Satisfaction with Level 2 charging has decreased to 614 points, primarily due to a lack of focus and investment compared to DC fast charging. This shift has led to worsening satisfaction with Level 2 charging speeds.

6. Impact of Focus Shift: The increased focus on fast charging infrastructure is negatively impacting Level 2 charging, highlighting a need for balanced development across different charging types to improve overall user experience.

Learn more here.

DOT's Strategy for a Greener U.S. Transportation Future

The latest DOT report to Congress outlines a robust strategy for slashing greenhouse gas (GHG) emissions in the transportation sector by enhancing public transit, boosting rail and freight efficiencies, advancing aviation and sustainable aviation fuel, investing in electric vehicle infrastructure, and more.

If you've been following the sector for a while, you won’t be surprised by the substance of the report. It’s clear what the sector needs to do to decarbonize; the challenge lies in aligning the will to do it with the right companies and available funds to accelerate advancements and scale technologies.

But are we moving fast enough? Of everything in this report, the one thing that stood out to me is the projected CO2 emissions versus emission reduction goal. So much has already been done to accelerate transportation decarbonization, yet the stark divide and growing gap between the goal and projected emissions continue to weigh heavily on me. With 2025 just around the corner, every day we don’t move faster means that gap becomes more and more entrenched.

Granted, the report does state that the analysis for this projection (graph on the left) may not be a complete picture of the future. Instead, it points to the 2023 Voluntary Supplement to the U.S. Fifth Biennial Report, which it states provides a deeper dive into emissions reductions that may be possible with recent policy wins including BIL and IRA.

In that report, it models a 2023 Policy Baseline showing economy-wide GHG emission reductions of 33 to 41 percent below 2005 levels in 2030 --> putting the U.S. closer to its 50-52 percent reduction target.

Learn more here