Santiago-based HIF Global is building the Haru Oni eFuel pilot plant in Punta Arenas, Chile.
The project was started by Porsche and carried out with partners who include Siemens Energy and ExxonMobil.
Production of eFuels from hydrogen and CO2 using wind energy is expected to start there in mid-2022. These electricity-based synthetic fuels enable nearly-CO2-neutral operation of combustion engines and help mitigate global warming.
An eFuel is produced using electrolysis which splits water into oxygen and hydrogen to produce synthetic methanol. The process is energy intensive and requires abundant source of renewable energy.
While solar and hydropower could be harnessed to make eFuel, Porsche is relying mainly on wind energy in its pilot project as the most viable energy source.
Porsche sees its first application in motorsports and is already testing it out in its race cars.
For a start, the pilot plant is expected to produce around 130,000 litres of eFuels in 2022.
The capacity will then be expanded in two stages to around 55 million litres by 2024, and around 550 million litres by 2026. That's still a drop in the ocean in terms of global fuel consumption.
While electric cars are starting to gain traction in many parts of the world driven by sales in China, Europe and North America, ICE cars are expected to remain a large percentage of cars sold globally for decades to come.
Porsche has been working on eFuels for a number of years and sees its development as complementary to its main focus of electrifying its fleet of cars. It targets 80% of its cars to be fully electric by 2030.
With Taycan as the pointer to Porsche's future, it is spending heavily on electrification of its line-up but is also catering to its entrenched base of 911 and other ICE cars and the customers who have bought into them. They still form the bread and butter of its fortunes.
To Porsche, the solution is eFuels with a vengeance. At the same time, eFuels also help burnished its green credentials in an age where many companies are eager to be seen as ESG (Environmental, Social, and Governance)-compliant.
An eFuel can run on modern cars without any modifications, said Michael Steiner, Member of the Executive Board for Research and Development at Porsche AG at an online media roundtable interview earlier this week.
For older cars, however, additives may need to be added to the fuel, he said, adding that an eFuel burns as efficiently as fossil fuel.
While cost of eFuel production is high, how eFuels are priced would depend on taxes and other charges by governments in each jurisdiction. With tax rebates for the "green" fuels, they should be able to compete with fossil fuels, said Steiner.
Barbara Frenkel, Member of the Executive Board for Procurement at Porsche AG said the company has budgeted US$100mil (RM422mil) to push the eFuel agenda.
“eFuels make an important contribution to climate protection and complement our electromobility in a meaningful way. By investing in industrial eFuel production, Porsche is further expanding its commitment to sustainable mobility."
Other investors in HIF Global LLC include Chilean company Andes Mining & Energy (AME) and the American companies EIG, Baker Hughes Company and Gemstone Investments.
Porsche said the collective funding from the various investors for the Chile and eFuel plants elsewhere was "in the low nine-figure USD range". The money would be used to develop industrial eFuel facilities in the US, Chile and Australia, which have large supplies of wind, solar and hydro.
Steiner and Frenkel.
