E-fuels versus DACCS

Total costs of electro-fuels and direct air captureand carbon storage while taking into account directandupstream emissions and environmental risks

Study on behalf of Transport & Environment (T&E)

For defossilizing European aviation,synthetic fuels or electro fuels (e-fuels) might play a pivotal role in the longterm.The UK’s Committee on Climate Change, however, suggests that offsetting aviation’s emission from fossil kerosene through direct air capture and carbon storage DACCS) is more cost effective than replacing fossil kerosene by e-fuels. In this study we estimate and compare the total costs of both options while considering direct and upstream emissions and the environmental risks of both options. The aim of this comparison is to identify the scope of the potential cost advantage of the DACCS route and to assess whether it involves risks or caveats in the longer term.

Based on the data available in the literature we estimate the levelized costsfor the e-fuels and the DACCS options; these costs denote the total costs that accruefor avoiding one t CO2 in a given year. For our analysis we ensure that both options are equivalent in terms of their total climate impact beyond CO2 and compare total additional costs of each option, the development of costs per unit of CO2 avoided, additional costs per person kilometer and the additional cost as a share of the ticket price.

In summary we conclude that the perceived cost advantage of DACCS may indeed materialize in the future. Under certain assumptions, it may be smaller or even disappear. However, it is not unlikely that the DACCS option is more cost-effective than the e-fuels option.

Nevertheless, pursuing the DACCS option will not bring about the full defossilization of European aviation. On the contrary, it might result in carbon lock-in and may make the transition to a post-fossil approach at a later stage even more expensive due to the persisting fossil-based capital stock and infrastructure. Taking into account that the difference between the e-fuels and the DACCS option ranges between 1.0% and 2.5% of the ticket pricein 2050, which can certainly be borne by passengers, it should be considered whether embarking on the e-fuels option would be more consistent with the precautionary principle as the basic rule of environmental policy.