State of adoption among alternative fuels
For the past hundred years or so, the world has run on oil. Petroleum fuels such as gasoline, diesel, fuel oil and kerosene have powered automobiles, trucks, ships, and airplanes with little competition from alternative fuels. This is rapidly changing, thanks to a host of new fuels. Here are the main ones and their respective states of adoption.
Renewable diesel demand is on the rise
Hydrotreated vegetable oil (HVO), also known as renewable diesel, is a drop-in replacement for diesel. Its use is only constrained by its availability, which is currently fairly limited. According to the U.S. Department of Energy, there were five plants producing renewable diesel in 2020, with a combined capacity of 550 million gallons per year. Although it may seem like a lot, it is just a drop compared to the overall diesel use—about 122 million gallons per day in the United States alone.
With more production capacity coming online which could add 8 billion gallons per day in capacity—and sustained demand—the use of renewable diesel is bound to dramatically increase in the next five to ten years, both for road applications and industrial applications.
Biodiesel – will its availability impact usage?
The use of biodiesel blends is not uncommon, though usage is also limited by availability. In 2020, about 2 billion gallons of biodiesel were produced in the United States. In many respects, renewable diesel is superior to biodiesel. Renewable diesel is typically viewed as a drop-in replacement for regular diesel, while operation with biodiesel blends exceeding B20 create challenges related to fuel storage, gelling of the fuel in moderately low temperatures, and injection system durability. It is therefore expected to supplant biodiesel in all but niche applications over the coming decade.
Natural gas is supplanting liquid fuels in many industrial applications
Natural gas is currently the number one alternative fuel for motor applications. Garbage trucks and transit buses running on natural gas are especially common. Natural gas is also continuing to supplant liquid fuels in a variety of industrial applications, such as peak power generation, oil and gas production, mining, and other applications. The worldwide natural gas consumption has been growing steadily at a rate of about 2% per year for the past 20 years. For the period between 2021 and 2025, the International Energy Agency is expecting a slight slowdown in demand growth. Most of the new demand will be coming from the Asia Pacific region. Beyond 2025, forecasts can differ widely, depending on macro scenarios of renewable energy adoption.
Renewable natural gas, a low-carbon alternative to natural gas
Renewable natural gas (RNG), is produced from organic waste such as animal manure. It is nearly indistinguishable from natural gas obtained from fossil resources. RNG is used as a low-carbon alternative to natural gas, or simply where the availability of natural gas is limited. Although there is a great demand for RNG, its availability is driven by applications and geographies. For example, 60% of all on-road natural gas fuel used in the U.S. is already RNG.
Natural gas and green hydrogen blending is popular amongst consumers
Blending hydrogen obtained from renewable energy into existing natural gas networks is an attractive idea. For hydrogen producers, it solves the problem of transporting the hydrogen to customers. For consumers, it results in reduced CO2 emissions with no or little effort. Europe leads the way in that regard, with several pilot projects under way. Off-network blending is also actively pursued by power utilities, and is set to gain traction. Off-network blending is an option for power plants when their natural gas service does not blend hydrogen—yet. Power plants blend hydrogen with the natural gas that they receive on their premises. The hydrogen can be produced locally or received from other means. In Utah (U.S.), for example, the Intermountain Power Plant is currently being repowered with combustion turbines designed to run on a 20% blend of hydrogen and natural gas initially, with the intention to progress to 100% hydrogen-firing over the coming 10 years.
Green hydrogen usage expected to grow
The use of green hydrogen in motor vehicles is rare, but is expected to become increasingly common in medium and heavy-duty applications. Cummins Inc. is developing both fuel cells and hydrogen internal combustion engines for use in trucks, buses and other vehicles.
There is also a great deal of interest in using green hydrogen in chemical processing industries and for ammonia production (primarily for fertilizer production).
Methanol and ammonia – easier to store, transport and handle
Methanol and ammonia are energy carriers that can be produced from green hydrogen. Since they are in liquid form at room temperature, they are easier to store, transport and handle than hydrogen. Today, methanol and ammonia are primarily produced from natural gas. Methanol and ammonia can also be produced from renewable resources such as biomass or renewable hydrogen. Methanol and ammonia are common chemicals used in a large variety of industrial processes. These processes can be effectively decarbonized by switching to green methanol or ammonia. They also show potential as motor fuels, particularly in marine propulsion, or in the case of ammonia, as a replacement fuel for coal in existing power plants. These uses are currently limited to demonstration programs, but experts cited by Lloyd’s Register expect that by 2030, ammonia may account for 7% of all fuel used for marine shipping globally. There are also several methanol-fueled vessels on the water today, including ferries, offshore support vessels and chemical tankers. Methanol is available globally, and shows good compatibility with existing engine technologies. One key advantage of methanol is it easily mixes with water and is only moderately hazardous to the marine environment-contrary to petroleum fuels and ammonia.
As well as the state of adoption of alternative fuels, it is important to consider their emissions reduction capability and other advantages and disadvantages that could be faced when switching to these fuels.