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Applied Energy 232 (2018) 617–639

Contents lists available at ScienceDirect

Applied Energy
journal homepage: www.elsevier.com/locate/apenergy

Potential for hydrogen and Power-to-Liquid in a low-carbon EU energy T


system using cost optimization
Herib Blancoa,b, , Wouter Nijsb,1, Johannes Rufc, André Faaija

a
Energy Sustainability Research Institute Groningen, University of Groningen, Nijenborgh 6, 9747 AG Groningen, the Netherlands
b
European Commission, Joint Research Centre, Directorate C – Energy, Transport and Climate, Knowledge for the Energy Union, Westerduinweg 3, NL-1755LE Petten, the
Netherlands
c
Zehntstr. 7a, 76227 Karlsruhe, Germany

HIGHLIGHTS

• Power-to-Liquid (PtL) can reduce import costs and improve EU energy independence.
• Biomass-to-Liquid (BtL) combined with PtL boosts production of carbon neutral fuels.
• Electrolysis potential is the largest when there is limited carbon storage.
• Transport demand is met by electricity and hydrogen complemented by PtL/BtL.

ARTICLE INFO ABSTRACT

Keywords: Hydrogen represents a versatile energy carrier with net zero end use emissions. Power-to-Liquid (PtL) includes
TIMES the combination of hydrogen with CO2 to produce liquid fuels and satisfy mostly transport demand. This study
Energy systems model assesses the role of these pathways across scenarios that achieve 80–95% CO2 reduction by 2050 (vs. 1990) using
Power-to-X the JRC-EU-TIMES model. The gaps in the literature covered in this study include a broader spatial coverage
CO2 utilization
(EU28+) and hydrogen use in all sectors (beyond transport). The large uncertainty in the possible evolution of
Decarbonization
the energy system has been tackled with an extensive sensitivity analysis. 15 parameters were varied to produce
more than 50 scenarios. Results indicate that parameters with the largest influence are the CO2 target, the
availability of CO2 underground storage and the biomass potential. Hydrogen demand increases from 7 mtpa
today to 20–120 mtpa (2.4–14.4 EJ/yr), mainly used for PtL (up to 70 mtpa), transport (up to 40 mtpa) and
industry (25 mtpa). Only when CO2 storage was not possible due to a political ban or social acceptance issues,
was electrolysis the main hydrogen production route (90% share) and CO2 use for PtL became attractive.
Otherwise, hydrogen was produced through gas reforming with CO2 capture and the preferred CO2 sink was
underground. Hydrogen and PtL contribute to energy security and independence allowing to reduce energy
related import cost from 420 bln€/yr today to 350 or 50 bln€/yr for 95% CO2 reduction with and without CO2
storage. Development of electrolyzers, fuel cells and fuel synthesis should continue to ensure these technologies
are ready when needed. Results from this study should be complemented with studies with higher spatial and
temporal resolution. Scenarios with global trading of hydrogen and potential import to the EU were not in-
cluded.

1. Introduction 1000 GtCO2e. Delayed action will only lead to more drastic changes
required later on to stay within the carbon budget [1]. To achieve this
Global surface temperature has already increased by 0.9 °C and target, key alternatives are carbon capture and storage (CCS), sustain-
global mean sea level has already risen by 0.2 m compared to pre-in- able biomass use, energy efficiency and renewable energy sources
dustrial times. To limit the temperature increase to 2 °C by 2100, cu- (RES). Hitherto, a lot of attention has been given to the power sector,
mulative emissions over the 2012–2100 period have to stay within which is the one with the highest RES penetration mainly through the


Corresponding author.
E-mail addresses: [email protected] (H. Blanco), [email protected] (J. Ruf).
1
The views expressed are purely those of the authors and may not in any circumstances be regarded as stating an official position of the European Commission.

https://doi.org/10.1016/j.apenergy.2018.09.216
Received 4 June 2018; Received in revised form 14 September 2018; Accepted 26 September 2018
Available online 12 October 2018
0306-2619/ © 2018 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license
(http://creativecommons.org/licenses/BY/4.0/).
H. Blanco et al. Applied Energy 232 (2018) 617–639

contribution of hydropower, wind and solar. Nevertheless, for a fully vs. domestic).5 Even if hydrogen covers only a small part of the sector, it
decarbonized system, the emissions from all sectors of the energy would imply a significant increase in H2 production capacity compared
system (power, heat, transport), but also non-energy related sectors to current values.
(e.g. agriculture and land use) have to be eliminated. This study uses a bottom-up cost optimization modeling approach
A promising option to decarbonize all sectors is to use a versatile that includes capacity expansion, covers the entire energy system for
energy carrier that can be easily transported and converted in me- EU28+ (EU28 plus Switzerland, Norway and Iceland). The reason for
chanical power, heat and other forms of energy. This has been the this choice is to be able to evaluate the Power-to-X (PtX) options and
motivation to propose an electricity based economy and hydrogen integration between sectors and at the same time, consider the optimal
economy [2–5]. In spite of fulfilling the requirement of versatility, capacities needed to achieve a low carbon system. Scenarios evaluated
electricity has two main disadvantages. First, there are no existing cover 80–95% CO2 reduction by 2050 (vs. 1990) in agreement with the
technologies to directly store large amounts of it for long (> 1 month) EU strategy [20]. The main targeted questions for hydrogen are to
periods of time. The best (fully developed) technology is pumped hydro identify the production technologies as well as its main process chains,
storage, which constitutes more than 99% of existing electricity storage end use allocation to the different sectors and infrastructure cost. On
capacity [6]. However, in its conventional configuration, it is limited by PtL, the main questions are sources for CO2, competition with biofuels,
geographical constraints (e.g. existence of reservoirs, height difference electricity and hydrogen itself and range of conditions (system con-
and water source) and its potential might still not be enough to satisfy straints) that make the technology attractive. Given the long term
the needs of a fully renewable system [7]. The other disadvantage of nature and high uncertainty associated to the evolution of the system,
electricity is that sectors like aviation and maritime transport present an objective is to do a systematic analysis of system drivers that favor or
challenges for electrification due to weight, drag and space require- constrain these technologies and determine their robustness (e.g. if
ments. deployment is present across multiple scenarios). This complements a
Hydrogen can provide a solution for transport, while still being a previous exploration of Power-to-Methane [21], which is another
versatile energy carrier to be used across sectors. Tail pipe emissions for technology satisfying similar boundary conditions in addition to the
hydrogen are zero since it does not contain carbon. Instead, its emis- competition for the CO2 molecule with PtL.
sions are defined by the production technology and upstream value
chain [8–12]. A proposed route for a low CO2 footprint is to use RES 2. Literature review and gaps
electricity for hydrogen production with electrolysis. This would allow
moving away from fossil fuels in transport, which can contribute to The literature review is divided mainly into two sections: one
energy security (electrolyzers can be installed locally and produce hy- tackling the activities at EU level from research to policy with the ob-
drogen from local RES sources), lower market volatility (oil is a global jective to put in perspective the levels of deployment foreseen in this
market continuously affected by upheavals and political interests) study in comparison with current policies and initiatives. The second
leading to more stable prices and smaller effect on consumers. With section summarizes trends and gaps observed in previous energy system
hydrogen, the end use technology can change to a fuel cell rather than models that have focused on hydrogen and based on this, identifies the
an internal combustion engine leading to a higher efficiency2 and less additions of this work to that literature.
energy required per traveled distance. It can complement the usually
shorter range of electricity vehicles. Fast response electrolyzers can
2.1. Hydrogen landscape in the EU
provide flexibility and balancing to the power system while reducing
curtailment. Lastly, it can have distributed applications where hy-
Activity at the EU level on hydrogen can be analyzed from three
drogen is produced and consumed locally. Among its disadvantages are
different perspectives: research activities, roadmaps and potential role
the infrastructure development needed, the current high costs for
in future low-carbon systems and consideration in current policy fra-
electrolyzers and fuel cells where the potential development is linked to
meworks.
learning curves and technology deployment, their efficiency loss (ty-
In terms of research, 90% of all the EU funds for hydrogen are
pical efficiencies for electrolyzers are 65–75% (HHV) on energy basis
covered by the FCH JU (Fuel Cell and Hydrogen Joint Undertaking),
[13]) and the volumetric energy density in spite of being higher than
which is a public private partnership. The first phase ran from 2008 to
batteries, it is still about 4 times lower than liquid fuels.3 Even with the
2013 with a budget of 940 M€ and a second phase from 2014 to 2020
importance of volume (due to drag) in aviation, hydrogen has been
with an increased budget of 1330 M€. In terms of roadmaps, one of the
continuously evaluated for such application [14–18]. A key limitation
best known is HyWays [22]. It was published in 2008 and considered
for this use is cost, where the fuel can represent up to 40% of the op-
start of commercialization by 2015, 2.5 million FCEV (Fuel Cell Electric
erating cost and a small increase due to drag or weight can represent a
Vehicles) by 2020 (EU) and a penetration rate of up to 70% for FCEV by
large increase in total cost.
2050 (∼190 million FCEV). A more recent roadmap has been done by
Current global hydrogen production is in the order of 50 mtpa,4 out
the IEA in 2015 [23], which proposes 30,000 FCEV worldwide by 2020,
of which the EU28 share is close to 7 mtpa (equivalent to 0.84 EJ).
8 million by 2030 and 30% penetration by 2050. In terms of future
Industry sector dominates with more than 90% of the use. 63% of this is
scenarios for EU as a whole, the EU Reference Scenario [24] only
used by the chemicals sector (ammonia and methanol), 30% by re-
considers hydrogen for transport, where it barely plays a role with 0.1%
fineries and 6% by metal processing [19]. Only 9% of the hydrogen
by 2030 and 0.7% by 2050. This only considered a (greenhouse gas)
market is merchant (meaning traded between parties as most of it is
GHG emission reduction target of 48%. On the other hand, the Energy
actually produced on-site and resulting from process integration). The
Roadmap 2050 [25] does have a more ambitious target (80% reduc-
size of the transport sector is 12.3 EJ for road transport (cars, trucks,
tion), but make no mention of hydrogen and transport relies on higher
buses) and close to 2 EJ for both aviation and navigation sectors (where
efficiency standards, modal choices, biofuels and electricity. The 2 °C
the largest contribution is from international transport by a ratio of 9:1
scenario with high hydrogen from IEA [23] uses hydrogen for transport
and foresees a demand of 2 mtpa for 35 million FCEV in EU46 by 2050.
In terms of policy, hydrogen and synthetic fuels are not explicitly
2
42–53% for fuel cells, while an ICE is around 20%. mentioned in most of the directives. The Renewable Energy Directive
3
The mass energy density is around 2.5 times higher for hydrogen, which
would lead to less weight. The trade-off for fuel consumption is drag (volume)
5
vs. weight. Eurostat. [nrg_100a] – Simplified energy balances – annual data.
4 6
mtpa = million tons per annum. Germany, France, Italy and United Kingdom.

618
H. Blanco et al. Applied Energy 232 (2018) 617–639

[26] establishes a target for a share of advanced renewable fuels (6.8% is also a recent review on hydrogen in low-carbon systems [106]. Some
for 2030) and has specific targets for biofuels (3.6%), but none for trends across studies are:
hydrogen. A recent revision (June 2018) [27], includes a mandatory
minimum of 14% of renewables in Transport by 2030, to be achieved • There seems to be a trade-off between spatial resolution and portion
via obligations on fuel suppliers. The mutual consent to cap conven- of the energy system covered. Four scales are identified: (1) global
tional biofuels EU-wide at a maximum of 7% opens perspectives for studies with focus on hydrogen for cars [63–65,107–114]; (2) na-
electricity, hydrogen and PtL/BtL in transport. It also suggests the ex- tional studies covering the entire energy system
tension of guarantees of origin for renewable gases like hydrogen or [54,57–60,62,66,67,79–81]; (3) local studies looking at optimal
biomethane. The Fuel Quality Directive (FQD) is based on a mandatory locations and routes for the infrastructure (focused on hydrogen)
6% GHG reduction by 2020 compared to a 2010 fossil reference of [55] and (4) more specific cases to optimize fueling stations and
94.1 gCO2/MJ [28] and only mentions hydrogen in the reporting specific routes for a community [56].
guidelines 2015/652 [29]. Hydrogen falls in the category of electricity • There is also a trade-off in spatial scope, resolution and the extent to
storage providing flexibility (supply driven) rather than an alternative which parameters are endogenous. Some studies [79–81] have high
for sustainable transport (demand driven). For example in the Clean spatial and temporal resolution (hourly and 12–402 regions for
Energy Package, it is presented as an alternative to integrate Variable Germany), but take demand for commodities (electricity and hy-
Renewable Energy (VRE) and clustered under the FCH JU. Storage is drogen) as exogenous parameters and do not consider the compe-
not focused anymore only on power, but also extended to promote tition between energy carriers and the dynamics of supply-demand.
sectorial integration options (PtX) [30]. In the other extreme, there are studies (e.g. [63–65]) that have a
In most of these documents [26,28–32] hydrogen will contribute to wider geographical scope (EU/global) with endogenous demand and
achieve the targets. However, they do not have specific actions to prices for the commodities at the expense of temporal and spatial
promote hydrogen uptake. EU policy framework does not hinder hy- resolution (representative time slices and regions that include var-
drogen development, but it does not provide a strong support either. ious countries).
This conclusion was reached back in 2010 through a more detailed
analysis [33], but it seems it has not changed since. Different support Some of the gaps that remain from this literature are:
schemes are needed for hydrogen. As an energy carrier, policies should
not only target production, but also its distribution (different from • Competition between all sectors (residential, commercial, industry,
VRE). It is not fully compatible with existing infrastructure (different power and transport) for hydrogen use.
than biofuels) and it requires incentives for its development. • Incorporate competition between alternative sources of fuel (e.g.
7
hydrogen, methane, XtL, electrofuels and biofuels).
2.2. Hydrogen in future low carbon systems • A systematic analysis of the relation between hydrogen potential
and different system configurations (e.g. biomass potential, CO2
Studies on hydrogen can broadly be classified in the following ca- target, fuel prices).
tegories: • Hydrogen role considering a differentiation between technology
specific drivers (e.g. capital expenditure -CAPEX learning curve) and
• Technology [13,34–37]. Tackle breakthrough in material, operating system drivers (e.g. CO2 reduction target) to establish performance
conditions, testing, efficiency, operational performance and outlook targets for the technology.
for the future for electrolysis and fuel cells. • Cover both the entire energy system (alternative uses), spatial dis-
• Supply chain [38–46]. Discuss the different alternatives for pro- tribution of infrastructure and consumer choices for technology
duction, storage and distribution to end user considering cost, scale adoption in private transport.
(H2 use) and efficiency, but focused only on hydrogen.
• Geo-spatial studies (GIS – Geographic Information System) [47,48]. Some gaps in literature that are closed with the current study are:
Establish the link between potential sources for hydrogen (e.g. wind (1) the geographical scope is the entire European region; (2) con-
farms) and demand (e.g. cities) considering their spatial distribu- sidering trading and dynamics between countries; (3) additional sectors
tion. other than transport are considered and (4) in transport itself, even
• Economic [18,49–53]. Compare levelized cost of potential future though additional features such as inconvenience cost, risk aversion,
technologies with steam methane reforming and make sensitivities anxiety cost, among others are not included, there is a finer cost and
around raw materials, gas prices and learning curve effect. efficiency resolution for cars for the model to progressively change
• Energy [54–81]. Hydrogen use in different sectors (transport, towards new technologies and have enough options to do so [115]. The
power, heating, industry, storage) capturing the effect of policies study includes up to 95% CO2 reduction scenarios, competition be-
through commodity and technology substitution considering cost tween hydrogen, PtL, synthetic fuels and biomass for transport and
and emissions. robustness of the technologies for a range of potential future scenarios.
• Storage [82–86]. Role of hydrogen as long-term or seasonal storage It also allows analyzing the transition to renewable hydrogen for sectors
in a RES system. already using it (e.g. refineries). Gaps that will remain after this study
• Power [87–102]. Use of electrolyzers to provide grid services (i.e. are spatial consideration of sources, infrastructure and sinks, validation
balancing) and aid VRE integration. Wind integration and even of results with a higher temporal resolution and behavioral component
nuclear integration studies fall in this category. in modal shifts for private transport.
• Roadmaps [22,103–105]. Describe the various roles hydrogen can This model has also been used in the past for evaluating the po-
have in a future energy system, potential benefits and establish ac- tential role of hydrogen in EU [116]. Differences with respect to such
tions to promote its use at various dimensions (research, funding, work are further model development (additional technology portfolio
regulation, among others). and focus on PtX representation) and the systematic parametric analysis
• Policy [33]. Understand level of subsidy (or tax cut) for hydrogen to to identify the drivers and barriers for hydrogen in multiple potential
be used across sectors along with its impact on GHG emissions and scenarios.
contribution to reduction targets.

Many previous studies have assessed the role of hydrogen with an 7


XtL refers to synthetic fuels produced by biomass, coal and gas to liquids
energy system model [54–81] (the same category as this study). There (Fischer Tropsch), where BtL is the more relevant for low-carbon scenarios.

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H. Blanco et al. Applied Energy 232 (2018) 617–639

3. Modeling approach and structure 3.2. Hydrogen network

The modeling approach is based on cost optimization covering the The hydrogen system is divided in 4 main steps: production, storage,
entire energy system and it includes investment, fixed, annual, de- delivery and end use.
commissioning and operational cost, as well as taxes, subsidies and
salvage value as part of the objective function. The software used is • For production, there is a total of 23 processes, where variations
TIMES (The Integrated MARKAL-EFOM System) [117–119], which is a arise from fuel (methane, biomass, coal, electricity), technology
bottom-up (technologically rich), multi-period tool suitable to de- (reforming, gasification, electrolysis and variations therewith and
termine the system evolution in a long-term horizon. The model uses carbon capture) and size (centralized, decentralized). Techno-eco-
price elasticities of demand to approximate the macroeconomic feed- nomic parameters can be found in [131]. The model did not include
back (change in demand as response to price signals), which allows PEM (Proton Exchange Membrane – Technology Readiness Level 7-8
transforming the cost minimization to maximization of society welfare. [137]) or SOEC (Solid Oxide) electrolysis (TRL 6-7 [137]) and these
Technology representation is achieved through a reference energy were added since they have potential for high efficiency and low
system, which provides the links between processes. Each process is cost [49,138]. Three sets of data were used for PEM to cover the
represented by its efficiency (input-output), cost (CAPEX and OPEX) uncertainty in future performance. For data used, refer to Appendix
and lifetime. Prices for all commodities are endogenously calculated A.
through supply and demand curves. Several policies can be added in- • For storage, there are 3 alternatives: underground storage,8 cen-
cluding CO2 tax [120], technology subsidy [121,122], regulations, tralized tank and distributed tank (20 MPa). The production tech-
targets, energy efficiency [123], feed-in tariffs, emission trading sys- nologies connected to underground storage are the ones applied at
tems [124] and energy security [125], among others. A common ap- large scale or corresponding to a medium size of a conventional
plication involves the exploration of decarbonization pathways technology. Centralized tank is used for relatively unconventional
[58,126–128]. Key output of the model is the capacity needed for every technologies (e.g. Kvaerner, oxidation of heavy oil) and smaller
technology, energy balance for each country in each time period, scale production.
trading, total emissions and cost breakdown. • For delivery, there are different pathways that can be followed,
Some of the aspects that are not covered with JRC-EU-TIMES are: including: compression, transmission, natural gas blend, liquefac-
macro-economy (except for the interaction through price elasticity), tion, road transport, ship transport, intermediate storage, distribu-
power plant operation (e.g. minimum stable generation, start-up time tion pipelines and refueling stations (L/L, L/G, G/G). Not all com-
and cost), land use, climate (e.g. reduced form geophysical model), binations among these are possible (e.g. liquefaction and injection to
behavioral choices for private transport, supply of resources (e.g. bio- the grid) and this results in 20 delivery chains considered. For the
mass), agriculture and non-CO2 emissions and pollutants. Natural cy- reasoning in selection, refer to [139]. Delivery cost for transport is
cles (hydrological, carbon) in the biosphere, political and social aspects between 1 and 6 €/kg depending on the delivery route chosen. The
are also omitted in the approach. Due to the focus on energy systems most expensive steps are refueling (up to 3.8 €/kg) and distribution
(leaving changes in agricultural practices, biomass burning, decay, pipeline (3 €/kg). The simplest pathway is blending which covers
petrochemical, solvents out of the scope) and only CO2 (no CH4, N2O, compression, storage and transmission (∼1 €/kg). See Appendix A
NOx and pollutants), the model effectively covers around close to 80% for more details and cost breakdown for individual steps.
of GHG emissions, noting that for 2014, the energy sector represented • In terms of end use, the hydrogen can be blend with the natural gas
68% of the GHG emissions, industry 7% and agriculture 11%, while (up to 15% in volume) and end up in any of the applications of this
CO2 was 90% of the GHG emissions [129]. commodity, used in the residential sector to satisfy part of the space
The model has been thoroughly described before [61,130–132]. heating demand (µCHP), industry (steel), transport (cars, buses,
Below are sections that have either been modified or that are essential trucks) or be used for fuel synthesis (combined with CO2). For
to understand for this study with extra information (data) in Appendix blending, 10% is already possible in some parts of the system [140]
A and a list of the changes done as part of this study in Appendix B. and the impact of using higher concentrations has also been assessed
[141]. The main limitations are on tolerance of the end-use devices
3.1. Overview of major inputs (e.g. CNG stations, gas turbines and engines) rather than on infra-
structure. Looking at a 2050 time horizon, it is expected that this is
The main exogenous parameters for JRC-EU-TIMES are: de-risked, but 15% is chosen to avoid overreliance on the alter-
native.
• Macroeconomic. Demand for services and materials and fuel prices
are aligned with the EU reference scenario that has PRIMES as A representation of these different steps is shown in Fig. 1. A dia-
centerpiece of the modeling exercise [24]. gram with more detail on the delivery paths is presented in Appendix C.
• Technology parameters. This covers cost, efficiency and lifetime for
the technologies and their evolution in time. Sources are mainly
3.3. Sectorial use of hydrogen
[133,134], while technology specific discount rates are from [24].
• Technology potentials. Each country has maximum flows for all
Hydrogen in the residential sector can be supplied by 4 pathways:
energy resources and associated mining production cost for fossil
centralized hydrogen with underground storage or tank, decentralized
fuels. The constraints for each country are taken from GREEN-X and
production and by blending with natural gas. It can be used directly to
POLES models, as well as from the RES2020 EU funded project, as
satisfy space heating demand through a PEM or solid oxide fuel cell
updated in the REALISEGRID project [116].

(µCHP) to satisfy both power and heat or blend with natural gas and
Interconnection between countries. This is relevant for electricity
satisfy the same need with existing technologies. This is an improve-
(ENTSO-E and Annex 16.9 of [116] for specific values), CO2 trans-
ment introduced in this study, where the previous version only counted
port cost (taken from [135]) and gas.

with a burner to satisfy space heating demand. For the specific data,
Base year calibration. Mainly done with Eurostat and IDEES
refer to Appendix A.
(Integrated Database on the European Energy Sector) database
[136]. For more detail on the categories used for each sector, refer
to [116]. 8
Typical values are 500,000 m3 with a hydrogen net storage capacity of 4 kt
[198].

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H. Blanco et al. Applied Energy 232 (2018) 617–639

Fig. 1. Structure of the hydrogen supply and delivery chain in JRC-EU-TIMES.

In the EU, steel represents 4.7% of the CO2 emissions [142]. Im- include electrolysis (which is the most expensive component at around
provements for the industry are divided in two categories: enhanced 350–500 €/ton on NH3), while the cost for the conventional process
operation and upgrading of current assets (e.g. process control, heat does include hydrogen production (reforming).
integration, gas recovery, insulation, monitoring) and technology
changes (Corex/Finex iron making, MIDREX, EnergIron/HYL, Direct 3.4. CO2 use
Sheet Plant (DSP) and CCS) [143]. The two most relevant improve-
ments for this study are the possible use of carbon capture (which could The CO2 molecule has two possible destinations, either under-
provide CO2 for possible use downstream) [144] and hydrogen as re- ground storage or re-conversion to an energy carrier. The alternatives
duction agent (e.g. MIDREX process) [142,145]. It has been shown for CO2 use are shown in Fig. 2.
[146] that H2 is the technology with the largest CO2 reduction potential Potential CO2 sources are industrial (steel, ammonia, glass and
in steel, in spite of resulting in a net increase of energy demand. For paper), power and supply (BtL, biogas, H2 production) sector. Direct air
more details on the steel sector, refer to Appendix A. capture (DAC) is introduced as a separate process. This is done as a
Hydrogen can also be used for refineries and ammonia production, sensitivity analysis to avoid overreliance on the technology and assess
which currently are 2.1 and 3.6 mtpa of the 7 mtpa EU total demand alternatives in case it does not develop as expected. Syngas is not ex-
[19]. Part of the hydrogen in refineries comes from internal processes plicitly modeled as a commodity, but instead is inside the (clustered)
(catalytic reforming), that needs to be supplemented by additional processes and techno-economic parameters. Processes in Fig. 2 include
production with methane reforming [147], while for ammonia, re- the electrolyzer, reverse water gas shift, Fischer Tropsch (or methanol)
forming is the step where nitrogen is introduced in the process. For and upgrading section. For data used for Power-to-Methane (PtM) refer
refineries, hydrogen production was disaggregated from the rest of the to [21], while data for PtL (including co-electrolysis) can be found in
processes subtracting the equivalent natural gas that would be used. Appendix A. There is a range of chemical intermediates that can be
Data from [148] was used for refineries, which contains the hydrogen produced from CO2 (e.g. urea, carboxyls, carbamates, inorganic com-
demand per country. For ammonia, using pure hydrogen requires plexes, polymers) [152,153] through different processes (e.g. photo-
changing the process configuration by eliminating the reforming step catalysis, mineral carbonation, photosynthesis, electrochemical reduc-
and adding an ASU (Air Separation Unit) to obtain the nitrogen and tion, algae) [154]. However, the entire petrochemical value chain is not
electrolysis to produce the hydrogen. Techno-economic data was taken explicitly included in JRC-EU-TIMES, but instead clustered in fewer
from [149,150], electricity consumption for the combined process (NH3 processes. Therefore, there is no technological detail to consider routes
conversion, compression and cooling plus ASU) is 0.39 kWh/kg NH3 that use pure CO2 as feed in order to be able to make trade-offs between
(still optimistic compared to [150] that estimates a 10 MW consump- the alternatives. The other possible sink for CO2 is underground that has
tion for processes other than electrolysis for a 300 t/d plant) and a a cost between 3.3 and 10 €/ton [155,156].
hydrogen requirement is close to 190 kgH2/ton NH3. The cost included
for this step includes the synthesis loop, ASU, compression and am- 3.5. Transport fuels
monia storage since electrolysis is a separate process in the model. This
leads to a specific CAPEX of 145 €/ton for a size of 2200 t/d. To put The transport sector is divided in road transport, aviation and na-
these numbers in perspective, cost is almost half of the conventional vigation. Road transport in turn is divided in sub-sectors (freight and
process (270 €/ton for a similar scale [151]). The main reason for this passenger) and can be satisfied with different fuels. The combination of
perceived advantage of the electrolytic route is that 145 €/ton does not fuels that can be used in each transport sector is shown in Table 1, while

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H. Blanco et al. Applied Energy 232 (2018) 617–639

Fig. 2. Alternatives for CO2 use in JRC-EU-TIMES.

Table 1
Combination of fuels use by transport sector.
Gasoline Diesel Fuel oil Jet fuel CNG LMGb LPG Ethanol 2nd gen biofuels Electricity H2

a
Bus x x x x x x x x x
Light Duty x x x x x x x x
Heavy Duty x x x x x x xa x
Car x x x x x x x x
Aviation x x
Navigation x x x x

a
It means option and data are available, but only done as a sensitivity analysis to avoid an overly optimistic scenario.
b
LMG = Liquified Methane Gas, which is used instead of LNG (Liquified Natural Gas) since methane can come from PtM, biogas or natural gas. Once they are
mixed in the grid, they cannot be differentiated. Henceforth, LNG will be used to refer only to natural gas (i.e. import).

the alternative intermediate carriers and conversion routes to produce heavy duty and marine transport has already been evaluated [21].
the fuels are shown in Fig. 3. For specific considerations for this section, For both sectors, there is a large contribution (50–75%) to GHG
as well as fuel shares refer to Appendix A. reduction from changes in operations, mechanical design, materials and
The terminology used here follows [157]. Electrofuels is the parent aerodynamics to CO2 emissions reduction that are not captured as part
term for fuels obtained from power (i.e. PtX). Synthetic fuel is used for of the current model, so there is an overreliance in fuel switch [163],
XtL (since results do not have coal or gas to liquids, this term implies which in reality might be lower than what the model predicts. The
BtL). Biofuels encompass both 1st and 2nd generation. A potential en- model has also been expanded with electric options for heavy duty
ergy carrier for aviation is hydrogen, but this is not included in this (battery-based) and buses with data from [164] and has been included
work. In spite of the vast research on this topic [14–18], its maturity in Appendix A. Currently, it is foreseen that electric heavy-duty trucks
was deemed too low to rely on it as possible low-carbon solution. will already be competitive in Europe by 2030 for regional distances
Furthermore, at this point, there is high uncertainty in the cost and [165], so it seems feasible that by 2050 it will be possible that all ca-
efficiency figures and even though assumptions could be taken for these tegories are electric. Estimates by IEA [166] consider a third of the
values, risks associated to technology deployment, performance and stock electric by 2050, with another third hybrid and only the re-
learning curve effect are more difficult to capture.9 Ammonia as fuel or maining fraction running on diesel. For buses, already in 2017, 13% of
storage [158,159] is not included in this study. the global municipal bus fleet was electric (99% of the electric buses in
Similarly, for navigation, several options have been studied, in- China), while 1.6% of the EU fleet was electric. Already today, a 250-
cluding hydrogen, batteries, anhydrous ammonia, compressed air and kWh bus has a lower total cost of ownership than a diesel or CNG bus.
liquid nitrogen, wind, solar and nuclear powered [160], but it was Barriers are the scalability and business models to promote the cost
decided not to include these. LMG is also an alternative quickly arising decline, standardization of charging infrastructure and potential effect
for navigation in EU and where efforts are being done to close the gaps on the electricity grid [167].
in regulatory framework to enable the use of LMG and develop the
required infrastructure [161]. This is driven by a benefit in sulfur 3.6. Biomass
emissions and a stricter regulation [162] rather than having CO2
emissions in mind. LMG is included in the model and its potential for Biomass competes not only among fuels for the transport sector
(biodiesel, ethanol, jet fuel), but also among sectors. If combined with
CCS for power generation it can lead to negative emissions that can
9
This could be done by changing the interest rate, but it would still require a compensate for positive emissions elsewhere in the system. Fig. 4 shows
sensitivity of the technology deployment with different rates, which is still not the variety of sources considered as “biomass”, as well as the potential
directly risk. pathways to satisfy the end demand.

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Fig. 3. Technology pathways for fuel production and use for final demand.

Some notes to bear in mind are: fossil route in spite of the much larger energy consumption, while
propylene and BTX actually lead to a CO2 increase if biomass were
• Starch and sugar can only be used for ethanol production, while used. For the specific values refer to Appendix A and for assumptions
rapeseed is the one that can be used for hydrotreated vegetable oil with respect to land use, logistics, heating value, scope of each cate-
(HVO). Therefore, for starch and sugar there is no competition with gory, potential by country, refer to [168].
either other fuels or sectors. The choice is only if the pathway should
be used and to what extent.

4. Scenario definition
Wood products can also be used for biogas production (not shown in
the diagram) and satisfy demand on the cement sector (which
Methodology falls in the category of technical scenarios, which
otherwise could not be satisfied).

consider ranges and different values for the input. This excludes the
“Common uses” in Fig. 4 refer to applications that biogas, biosludge,
synthesis of complete storylines that describe a plausible evolution of
municipal waste and wood products have in common, but not for
the system towards alternative futures. These constitute the quantita-
agricultural crops.

tive part of a scenario analysis, where the purpose has been mainly to
Biomass conversion to satisfy chemical demand is limited to pro-
analyze how changes in the future system can affect hydrogen and PtL
ducing the feedstock (e.g. synthetic oil and gas) needed. Explicit
capacity and energy. This should be followed up by complementary
alternative processes for olefins, BTX and aromatics were not in-
approaches and technology push/pull policies to promote deployment.
cluded.
Scenarios analyzed should not be seen as forecasts since it is unlikely
they are achieved within the specified time frame. To put the scenarios
The potential is between 10 and 25.5 EJ/yr for EU28+ by 2050.
in perspective, CO2 reduction targets analyzed are between 80 and 95%
This is based on [168] and in agreement with previous studies (6.2–22
compared to 1990. From 1990 to 2015, EU achieved close to 22% GHG
[169], 14 EJ/yr [170], 18.4–24 [171] EJ/yr). Most (> 85%) of the
reduction.10 In a similar period of time (32 years until 2050), achieving
biomass has a cost below 5 €/GJ. Two of the ones above this cost are
the target would not only mean nearly tripling the pace, but also that
rapeseed and starch (17 and 21.9 €/GJ respectively), which can only be
the more difficult (i.e. expensive) reduction will be achieved faster.
used for 1st generation biofuels and ultimately imply gasoline pro-
Instead the scenarios analyzed are meant to provide insights into the
duction for blending. Around half of the biomass potential falls in the
critical technology parameters as input to the decision making process,
forestry source and could be used for 2nd generation biofuels. Al-
assessing the uncertainties in future scenarios and their possible con-
though, it has the largest absolute potential, it is in direct competition
sequences (impact analysis).
with uses for electricity, heating, industry and hydrogen. Pathways not
The parameters that were varied across scenarios are listed in
included are the ones for chemicals production since this is an energy
model (sector is partially aggregated). A previous study [137] has
shown that biomass gasification with downstream conversion to me- 10
Greenhouse gas emissions by sector (source: EEA) (tsdcc210), indicator
thanol and ethylene already have a competitive cost compared to the Profile (ESMS).

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Fig. 4. Biomass sources and sinks covered in JRC-EU-TIMES.

Table 2
Key parameters varied across scenarios to identify trends and shifts in the system.
Parameter Explanation Rationale Scenarios

CO2 reduction target Total emissions target for 2050 compared to It is expected that hydrogen and PtL will play a larger role as target • 80% CO reductiona

• 95%
2
1990 becomes stricter CO reduction
• CO
2
a
CCS Absence of CO2 underground storage This has been identified as key option to decarbonize the energy storage available
• No
2
system, specially sectors other than power CO storage
• Reference
2
a
Biomass Refers to potential for crops, forestry, biogas Biofuels are an alternative for transport, but biomass can also be used (∼10 EJ/yr)
and waste (refer to Table 14 in Appendix A) for other sectors. This assesses the current uncertainty with respect to • Low (∼7 EJ/yr)
potential • High (∼25.5 EJ/yr)
PtL performance CAPEX, OPEX and efficiency (Table 8, Developments in co-electrolysis, catalyst for FT and methanol, • Reference (400 €/kW) a

Table 10) possible heat integration can lead to a range of PtL performance (see • Optimistic (300 €/kW)
Table 10) • Conservative (500 €/kW)
PEM performance CAPEX, OPEX, lifetime and efficiency of the Technology is its early stages. Learning curve is dependent on • Reference (750 €/kW) a

technology (Table 4) deployment which is in turn uncertain, as well as breakthroughs in • Optimistic (400 €/kW)
research • Conservative (1000 €/kW)
VRE Potential Higher PV and wind potential Initial estimates are conservative. More VRE will lead to more • Ref b a
(320/1650 GW )
electricity surplus to deal with where H2 and PtL can play a role • High (1140/3700 GW) [172,173]
a
Assumption for the reference scenario.
b
First number refers to onshore wind, while the second number refers to solar.

Table 2. These include parameters impacting the entire system and done based on previous studies [54–81] and results observed in initial
were identified as having a large effect on it (e.g. CO2 reduction target) runs. They are further reduced to the 8 main scenarios described below,
and specific ones for the technology that deal with the uncertainty in which are used to facilitate understanding of results. Insights from the
data. They were combined in over 50 scenarios (see Appendix D for a rest are included in the discussion were relevant, but not shown in
full list of scenarios and parameters varied). The combinations were graphs.

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H. Blanco et al. Applied Energy 232 (2018) 617–639

Fig. 5. Final energy demand by delivery carrier for main scenarios.

• Low-carbon (2 scenarios). It considers 80 and 95% CO reduction


2 5. Results and discussion
with no other constraints.
• No CCS (2 scenarios). 80 and 95% CO reduction with no CO un-
2 2 Results are divided in two main sections. (1) Introduction of the
derground storage since it has one of the largest impact over the overall system, its energy balance and composition (5.1) as well as the
technology choices and cost (CO2 price), as well it can present cost breakdown and main contributors (5.2); (2) parts of the system
challenges of social acceptance in the future. that are important for hydrogen and PtL since they are the subject of
• PtL world (1 scenario). It assumes 95% CO2 reduction and the best this work, including hydrogen use and sources, PtL contribution to fuel
foreseen PtL performance (“Optimistic” in Table 10) to establish the demand and CO2 sources and biomass balance. Hydrogen and PtL are
upper bound in technology activity in a world with no CCS and high expected to play a role in low-carbon systems, which will only be
VRE (with higher need for flexibility). achieved in the long term. Mid-term (2030) results had little variance
• Hydrogen economy (1 scenario). This uses 95% CO2 reduction, across scenarios since they are determined by the existing policy fra-
optimistic PEM performance (Table 4) and has SOEC as possible mework. Therefore, results focus on the 2050 time horizon comparing
production technology. No CCS and high VRE are considered to alternative scenarios. Only main scenarios are shown in the various
promote electrolysis. sections, but insights from the sensitivities have also been included in
• Biomass economy (1 scenario). It uses the highest biomass potential the discussion. Given the plethora of results, only a few have been se-
(∼25.5 EJ/yr including import), CO2 storage is not possible (con- lected for this section, while some complementary ones can be found as
servative assumption), 95% CO2 reduction and high VRE potential. Supplementary Information. To facilitate understanding, each section
• Business as Usual – BAU (1 scenario). This implies limited CO2 re- starts with the two most important ideas followed by the more in-depth
duction potential assuming there is limited efforts after currently explanation and each paragraph starts with a header with the main
established regulations are achieved. This assumes a 48% CO2 re- topic discussed.
duction by 2050, aligned with the EU reference scenario [24].
5.1. Energy demand and electricity mix
Another set of scenarios is done to establish the price and demand
curve for hydrogen by sector. For this, different scenarios are done with Hydrogen complements electricity as main energy carrier and enables the
a fixed supply hydrogen price to determine the uptake in each of the downstream liquid production through PtL. Without applying further reg-
demand sectors. This allows understanding (1) the maximum hydrogen ulatory instruments, CO2 storage would prolong the use of fossil fuels in the
price that makes it attractive for a specific application and (2) the ad- system, while still achieving the same CO2 emission target.
ditional demand for a lower price. In reality, when there is additional To reduce emissions either energy consumption or the CO2 emitted
demand for example for electrolysis, this would affect electricity prices, per unit of energy has to be lower. Fig. 5 explores the former by il-
which in turn affect the competition between hydrogen and electricity lustrating the total final energy demand for EU28+ with a split by
in downstream use. This supply-demand dynamic is inherently con- energy carrier.
sidered in the model, but it is further disaggregated in these scenarios. Energy efficiency. Final energy demand decreases by 2050 (vs.
By setting a fixed hydrogen price, it simplifies the analysis by focusing 46.4 EJ/yr for EU28+ in 201611). This is in spite large increases in
only on the demand side. The scenario chosen for the analysis was one services demand. Demand (traveled distance) increases by 27%
with 95% CO2 reduction, no CO2 storage (to have PtX as possible de- (2015–2050) in private transport, 20% for buses and almost 40% for
mand sectors), high VRE potential (requiring more flexibility) and no heavy-duty and even larger (+80–100%) in aviation. Industrial output
other deviations from the reference scenario. When changing any of increases by an average of 20%. Therefore, the reduction in final energy
these conditions, the optimal solution (e.g. CO2 price, electricity mix, demand is achieved by widespread use of more efficient options to
biomass use) is different, leading to a different demand curve. However, achieve 5–17% reduction by 2050. Across scenarios, demand for space
results obtained with this scenario were seen to be in line with trends heating in the residential sector decreases by 30–40% due to stricter
observed in other scenarios.

11
Indicator [tsdpc320] from Eurostat.

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H. Blanco et al. Applied Energy 232 (2018) 617–639

regulations implementing energy efficiency measures (insulation). A and buses), composed around two thirds by private cars and out of
40% reduction in demand of the residential sector is also accomplished which around 75 bln€/yr are from battery specific additional costs
through a shift to electricity, which has almost 75% share across the (compared to diesel/gasoline vehicles). The next largest sector is power
main scenarios, halving biomass contribution and nearly eliminating (between 500 and 1000 bln€) followed by the residential sector. CAPEX
gas use (reduction of 90–95% vs. 2015). Similarly, private transport represents the largest contributor to cost with around 77–81%12
reduces its energy demand by almost 60% (7.9–3.4 EJ) in large part due (4100–4700 bln€) for all main scenarios. The single parameter with the
to electric vehicles, which have 60–70% share of the market, while the largest effect is a high biomass potential, which can decrease annual
rest is due to the use of more efficient cars. These are cost-optimal re- costs by 440–510 bln€/yr compared to a scenario using the reference
sults, where political will and policy instruments are required to pro- potential (and with 95% CO2 reduction). The cost increase due to the
duce feasible business cases and drive the system in this direction. BAU tighter CO2 target is larger (220–440 bln€/yr13) than the respective
is still different from today due to higher use of carbon neutral biomass, increase due to the absence of CO2 storage (100–230 bln€/yr). This is in
lower cost for VRE (and higher deployment) and further allowance line with IPCC reports [174] that indicate CCS as a key technology,
reduction for the emission trading scheme. whose absence can lead to almost 140% higher total discounted cost
Energy carrier composition. 40–50% of the total mix of the final (2015–2100). The combination of a high biomass potential with carbon
energy demand is met by electricity followed by liquid fuels that are capture (BECCS) allows achieving the lowest annual cost in a scenario
still used for aviation and marine transport (15–25% of the mix, lower that still reaches 95% CO2 reduction,14 but still 4% higher than the BAU
when the system is more restricted and higher with the highest biomass scenario. The two sectors with the largest changes across scenarios are
potential) and hydrogen (demand for steel constitutes around 5% of the transport and power. Specific cost for power is around 75 M€/yr per
total demand, while heavy-duty road transport can shift to hydrogen in TWh of electricity demand. Deviations from this value are due to: (1)
some scenarios). Biomass contribution is relatively small since its direct lower VRE potential (increasing to 85–90) and (2) higher transmission
use to satisfy end use services is limited and instead it is transformed to cost (increasing to 90). In the transport sector, cost is 96–98% com-
one of the other energy carriers. Gas is largely displaced by RES in the prised by the vehicles purchase cost, which is in turn driven by the
power sector and by electricity in space heating. More detail of the average efficiency target of the fleet. Most efficient cars can be up to
drivers behind gas demand is part of a separate publication [21]. 20% more expensive, while heavy-duty trucks using hydrogen can be
Primary Energy Supply. The use of CO2 storage prolongs fossil 35% more expensive than their diesel counterparts (see Appendix A for
contribution in the system. For 80% CO2 reduction, fossil fuels still data and sources). Costs in the industry sector fluctuate between 115
provide 60% of the primary energy (see Appendix I), while their con- and 140 bln€/yr depending mainly on the CO2 price. Major cost com-
tribution decreases to 53% for 95% CO2 reduction. This quickly drops ponents are steel and paper with 17 and 50 bln€/yr respectively.15
to 36 and 16% for those two respective scenarios once CO2 storage is no Costs associated to the residential sector are relatively constant at
longer possible (since that CO2 will ultimately end up in the atmosphere 400 bln€/yr, out of which 120 bln€/yr correspond to the insulation
regardless of the fuel substituted) and remain at that level once a higher measures, 4–20 bln€/yr for batteries and almost 180 bln€/yr are other
VRE potential is used. With the high biomass potential (∼25.5 EJ/yr), appliances (for cooking, lighting and similar). The combination of
biomass is almost entirely used and can provide almost 40% of the lower gas demand and internal production of hydrogen and liquids
primary energy supply. With a more modest potential (∼10 EJ/yr), the (BtL/PtL) allows reducing the import bill from 420 bln€/yr in an 80%
primary suppliers are wind and solar with 50% of the mix when their CO2 reduction scenario to 350 bln€/yr for 95% CO2 reduction to only
potential is the highest. There are two opposite effects for low carbon 50 bln€/yr with no CO2 storage and only decreasing further as more
scenarios: (1) Higher electricity share leads to lower PES; (2) More, constraints are added since it limits the use of fossil fuels. Higher degree
biomass, hydrogen and PtX lead to higher PES (and lower efficiency). of electrification leads to grid expansion whose associated cost is pro-
Electricity balance. Close to 50% of the electricity demand is for portional to demand increase. Grid costs range between 60 and
electrolyzers (in scenarios without CO2 storage). This already creates an 130 bln €/yr and add 10–15 €/MWh to the electricity price only for the
additional flexibility during winter peak, when these units are turned new grid.
down and demand is almost halved. Additionally, there is around Discussion of system cost. To put these numbers in perspective,
350–420 GW installed capacity of gas turbines, around 130 GW of nu- there are different references that can be used. One is the total (ex-
clear, 180 GW of hydro, geothermal, CHP and storage complement the pected) size of the economy. With an expected growth of 1.7% per year
rest of capacity to be able to meet demand during winter peak. This is in [175], EU economy would reach almost 28,000 bln€ by 2050. IEA es-
line with previous studies [170] analyzing a 100% RES scenario for EU timates [176] that cumulative investment for EU in energy supply will
that had a total electricity generation of almost 12,000 TWh with be almost 2900 bln€16 (2012€) from 2014 until 2035 for a 450 ppm
consumption from the electrolyzers at almost 6200 TWh. scenario. However, this scenario considers 20% increase in primary
energy demand in OECD (assuming a similar trend for Europe) and it
5.2. Annual system costs and H2 and PtL contribution only focuses on the supply side (power, oil, coal, gas and biofuels). This
leads to an annual investment of around 150 billion€/yr, which is the
Annual cost is 8–11 M€/PJ (of demand) for hydrogen, while these are same as the historical trend for 2013 considering that in the last
almost 100 € for every ton of CO2 used for PtL. The two items that cause the 15 years, annual investment in global energy supply has more than
largest decrease in marginal CO2 price are the possibility of CO2 under-
ground storage and a high (25.5 EJ/yr) biomass potential.
12
Understanding of cost is necessary to understand how its structure These are overnight costs. The rest is fixed and variable OPEX, but without
changes across scenarios and the effects that hydrogen and PtL have on fuel prices since that is money transfer between processes to pay for their re-
spective costs.
the system. To aid this, Fig. 6 shows the cost breakdown for the main 13
Largest cost increase corresponds to scenario without CO2 underground
scenarios.
storage.
System cost breakdown. Total cost includes all costs ranging from 14
This corresponds to Scenario 11 in Table 17 and not to the Biomass sce-
facilities and infrastructure on large scale including equipment for in- nario that does not allow CO2 storage.
dustry to costs on the consumer side such as heat pumps, district 15
This does not include fuel cost (which is a major component of steel cost
heating, insulation measures and vehicles. A large part of this [199] when considered as stand-alone process) since that is endogenous in the
(∼1700 bln€) is actually the purchase of transport vehicles (cars, trucks model and reflected as costs in other sector (e.g. hydrogen production).
16
Value in reference is in US dollars and a conversion rate of 1.2 $ to € was
assumed, which is assumed throughout this article.

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H. Blanco et al. Applied Energy 232 (2018) 617–639

Fig. 6. Sectorial split for annualized system cost for 2050 including H2 and PtL fraction.

doubled at a global level from 700 to 1600 bln€ (Europe represents on (for the 10 European countries17 included in HyWays) increasing from
average 10% of the global investment) [176]. By adding stricter con- almost 7 bln€ in the previous 5 years and which was enough to reach a
straints, including the downstream costs (which are actually larger than 12% penetration of FCEV. Production step was also found to be 60–80%
supply) and including the OPEX component, the costs will greatly in- of the hydrogen cost. Currently, global investment in hydrogen pro-
crease. A final reference is the total expected costs in a scenario where duction only by the petrochemical industry is around 90 bln€/yr with
the CO2 reduction is not as drastic (BAU scenario, which has 48% CO2 the hydrogen market having a valuation of 350–420 bln€/yr [178].
reduction). With a BAU pathway, the system would have annual cost of PtL cost. This is between 0 and 50 bln€/yr. The annualized cost is
3250 bln€. Therefore, the more ambitious scenario of 80% reduction almost 100 € for every ton of CO2 used for PtL. CAPEX constitutes
implies a 12% increase of the annual cost or around 1.4% of the GDP for around 75% of the total cost, but this can be related directly to the input
2050 with respect to the BAU scenario. data used since the OPEX does not include the raw material prices and
Hydrogen cost. It is between 20 and 140 bln€/yr, where naturally the other components of the value chain (i.e. CO2 capture, downstream
this is proportionally related to the flows presented in Fig. 7. The spe- use). To put this in perspective, fossil liquids that are displaced by PtL
cific cost is between 8 and 11 M€/PJ of hydrogen demand. For 95% CO2 can be used as reference. Global investment in exploration and pro-
reduction with no other restrictions, infrastructure represents almost duction of oil (and gas) is ∼540 bln€/yr, while looking ahead, the
half of these costs. This includes pipelines, compression, refueling sta- cumulative new investment in oil facilities for EU28 estimated by the
tions, among others. This excludes the downstream use, where vehicles IEA [176] is 330 bln€ (2012€) for the period 2014–2035.
can represent 225 bln€/yr and buses up to 30 bln€/yr. As additional CO2 prices. A BAU scenario leads to 125 €/ton of CO2. By only
constraints are added, production contribution becomes larger reaching making stricter the CO2 target, the price increases to 350 €/ton for 80%
fractions close to 85% of the total cost (see Appendix J for breakdown CO2 reduction and nearly 740 €/ton for 95% CO2 reduction. This can
for each main scenario) for the scenarios where heavy-duty transport drastically decrease with higher VRE potential achieving a reduction of
shifts away from hydrogen (e.g. high biomass potential or electric op- 120 €/ton, but this is only the scenario when CO2 storage is not possible
tion possible). The reason for this is that with more restrictions, the meaning that the system is more restricted, electricity is more needed
importance of PtL is higher and the fraction of hydrogen being used for and a higher VRE potential makes a larger difference. The other large
PtL increases (see Section 5.3). When it is used for PtL, it is assumed positive change is that with a higher biomass potential, the marginal
they will be co-located and the infrastructure requirement is much CO2 price decreases by 360–540 €/ton, mainly due to the high versa-
lower. To put this number in perspective, HyWays [22] estimated in tility of biomass to be used across sectors and because combined with
2007 a cumulative investment for infrastructure build-up of 60 bln€ up PtL allows reducing the emissions from the transport sector, which is
to 2030. It has been estimated [177] that the total infrastructure the one with the highest abatement cost. Among the negative drivers,
(production, transport and refueling) for hydrogen is around 600 M absence of CO2 storage increases CO2 price to 580 and 1300 €/ton re-
€/TWh (1.3 bln€/yr per mtpa of hydrogen demand). Taking the hy- spectively, representing the largest (negative) change in CO2 price
drogen flow range of 20–120 mtpa (∼670–4000 TWh), the total cost caused by a single variable. This is in agreement with previous findings
would be ∼800–2400 bln€ with the annual cost depending on the
lifetime and interest rate assumed. Assuming 5% and 30 years lifetime,
the annual cost would be 25–210 bln€/yr. The same study [177] esti- 17
France, Germany, Greece, Italy, the Netherlands, Norway, Finland, Poland,
mates the cumulative investment for the 2025–2030 period as 60 bln€ Spain and the United Kingdom.

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H. Blanco et al. Applied Energy 232 (2018) 617–639

Fig. 7. Technology mix for hydrogen production and sectorial use across main scenarios.

[174] that show the importance of having CCS in the technology FCEV consume around 0.5 EJ. Note that the hydrogen demand for buses
portfolio. changes to electricity as soon as the electric option is allowed. Given
To achieve a zero-emissions scenario by 2050, one of the key con- that buses can already be competitive today, it is realistic to assume this
straints (CO2 storage, biomass or VRE potential) needs to be relaxed. demand will shift to electricity. The car fleet is dominated (∼60%) by
Otherwise, it might be too costly to pursue (95% CO2 reduction sce- Battery Electric Vehicles (BEV) and FCEVs represent around 10–15% of
narios already reach 1300 €/ton with electricity system three times as the fleet. A sensitivity done with 30% lower cost for FCEV increased the
large). Another option is direct CO2 capture from air coupled with low- FCEV share to 30%. The focus of this article is on the hydrogen/PtL
cost VRE. However, the rates of change and investment needed exclude nexus, while analysis of cost and efficiency evolution for powertrains
the possibility of delaying action. and effect on future demand is part of an upcoming publication by the
authors.
5.3. Hydrogen balance Electrolyzer capacity. It is noteworthy that the difference in cost
between the 95% CO2 reduction scenario and the Hydrogen scenario is
Limiting the number of flexibility options the energy system has to relatively small (2.4%). However, when looking at hydrogen flows (and
achieve the CO2 target increases the reliance on hydrogen. This means in- PtL contribution), the systems are fundamentally different. This in-
stalling around 1000 GW of electrolyzers (plus the VRE capacity upstream) troduces a dimension (other than cost) that can prove fundamental to
and shifting steel production to hydrogen in a time span of 30 years, which realize the transition, which is rate of change. Whereas the 95% sce-
will make the transition to low-carbon more challenging. nario has almost 80 GW of electrolyzer capacity, the absence of CO2
The key questions to be answered in this section are what the main storage increases this capacity to almost 1000 GW, due to the combined
sources of hydrogen are, where it is being used and how the demand effect of electrolysis having to replace steam reforming in the coun-
changes across scenarios. The hydrogen production and demand are terfactual case and doubling of the hydrogen flow for the additional PtL
shown in Fig. 7. demand. This is also in line with previous studies looking at a possible
Hydrogen demand. The smallest hydrogen flows are observed for 100% RES scenario for the EU [170] which estimated 960 GW. To put
scenarios with CO2 storage, given that with storage as possibility, CO2 is this in perspective, current global capacity of electrolyzers is around
not used and there is limited hydrogen consumed by PtL. Even then, 8 GW [23], assuming this is distributed by regions proportional to hy-
flows are in the order of 40–60 mtpa (4.8–7.2 EJ), which are still much drogen demand (EU is 7 out of 50 mtpa globally), EU should have close
higher than current total consumption in the EU (7 mtpa [36]). In these to 1 GW of installed capacity. To reach 80 GW of an unrestricted sce-
scenarios, the uses are for two sectors, namely industry (steel) and nario (95% CO2 reduction) implies an annual growth of almost 15% a
transport. Within transport, the sector providing the largest difference year, which implies a similar growth to what wind has experienced in
(discussed further in Section 5.5) is heavy-duty. Demand in this sector the 2007–2017 period (18% a year [179,180]). On the other hand, a
can be up to 4 EJ (∼33 mtpa) and it is driven by either more constraints capacity of 1000 GW requires a 24% growth per year, which is still less
in the system (making low carbon options more necessary for heavy- than the 32% observed for PV in the 2012–2017 period [179,180], but
duty) or lower H2 price (e.g. through better PEM performance). De- it seems optimistic to assume this sustained growth for the entire period
mand for buses is relatively low and constant at 0.4–0.45 EJ, while until 2050. Therefore, limiting technological choices of the system

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H. Blanco et al. Applied Energy 232 (2018) 617–639

could lead to a longer timeline for implementation due to the large can consume up to 50% of the electricity demand) that cannot act as
changes required in the composition of the system linking the results “base load” (i.e. constant demand) since there are periods when there is
from this study to the CO2 reduction target (and associated constraints) not enough generation. Besides, storage that is more suitable for daily
rather than a specific 2050 timeline. patterns (e.g. batteries) would only displace electricity use in time,
Hydrogen in other studies. To be able to compare these numbers while that energy is not needed as electricity, but as hydrogen instead.
with previous studies, two factors should be considered (1) most of the The highest demand is from the Hydrogen scenario with almost
previous studies focus on the transport sector (e.g. [109–111]) and (2) 120 mtpa (14.4 EJ). This is enabled by cheaper hydrogen due to an
the more restricted the technology portfolio is, the larger the hydrogen optimistic PEM performance and SOEC use, which leads to the cheapest
role will be since there are fewer choices to reach the same target. Since hydrogen in scenarios without CO2 storage (3.8 €/kg). This relatively
this study explores those more constrained scenarios, it is expected that cheaper hydrogen also enables the use in PtM, which is absent in most
hydrogen flows are larger. Ref. [113] assesses a global scenario with of the other scenarios.
400 ppmv of CO2, where hydrogen reaches a 20.6% share of final en- Hydrogen for other applications. Applications that are missing are
ergy consumption, but only for 2100, while for 2050 it is between 3 and the conventional ones in the present (refineries and chemicals, speci-
4%. One of the studies by international organizations with a prominent fically ammonia). Given the strict CO2 target, satisfying transport with
role for hydrogen is the Advanced Energy Revolution from Greenpeace. conventional oil and refineries will lead to not achieving the target.
This achieves 100% CO2 reduction for the energy system by 2050 and Therefore, alternative routes are chosen and in these future scenarios,
uses hydrogen in transport, industry, buildings and power [181]. Hy- refineries activity is drastically reduced (to 20% or less than their
drogen flow is around 27 mtpa (∼3.2 EJ) for Europe (excluding steel current output) and its associated hydrogen demand as well for most of
and PtL) and constitutes almost 11% of the final energy demand, which the scenarios. For ammonia, a new process was introduced using pure
is close to the 33 mtpa in the 95% scenario for this study (excluding hydrogen and oxygen (ASU), but the process carries the disadvantage of
steel). Shell Sky Scenario reaches 300 MtonCO2 emissions (equivalent the use of a more expensive commodity (hydrogen vs. natural gas) and
to 95% CO2 reduction vs. 1990) by 2060 with a hydrogen flow of the extra investment for the air separation. This is in agreement with
1.9 EJ/yr. Most of the hydrogen growth in their case is after 2060, previous studies [175] that show a limited shift to this route in a below
reaching a hydrogen flow of 4.8 EJ/yr [182]. 2 °C scenario. The preferred option to decarbonize ammonia is carbon
Hydrogen for steel. Steel demand is expected to be around 177 mtpa capture, even when no CO2 storage is available as the CO2 can be
(practically the same as the base year) for 2050. With a specific hy- used.18
drogen demand of 17 GJ/ton of steel [142], the sector could use up to Hydrogen production. In scenarios without CO2 storage, electrolysis
25 mtpa of hydrogen if satisfied entirely by direct reduction. There are is the main technology used for hydrogen production while steam re-
3 parameters that define the use for this sector: CO2 price, biomass forming with carbon capture is used when CO2 storage is possible. This
potential and coal availability. The main driver is the possible coal use. is in agreement with previous studies [184]. This leads to some in-
If coal is not allowed (e.g. due to general ban of fossil fuels), then al- efficiency since the hydrogen is used downstream in a sector where
most 95% of the demand is satisfied with hydrogen, reaching a demand electricity could be used (private transport). Nevertheless, a key ele-
of 24 mtpa for the sector. This happens even for 80% CO2 with CCS and ment is VRE contribution for electricity, the larger its share the higher
the reference biomass potential. In case coal is allowed, hydrogen sa- the need for options to manage surplus. Electrolyzers represent one of
tisfies around 25% of the demand for the same 80% CO2 reduction these alternatives to balance their variability when equipped with hy-
scenario. In scenarios with higher biomass potential (∼25.5 EJ/yr), drogen storage. Using BEV in combination with control and commu-
biomass use enables positive emissions elsewhere in the system (usually nication infrastructure to use the batteries as storage could be an al-
industry and transport). This happens even for high CO2 prices. For ternative. Another option is electricity storage which continues to get
example, for 95% CO2 reduction and no CO2 storage (and still coal cheaper and could reach prices of 125 €/kWh by 2030 and down to
allowed), the (marginal) price is around 930 €/ton for CO2. With this 83 €/kWh in the longer term [185,186]. A limitation they have is their
price, around 75% of the steel demand is satisfied with an electric low energy density, which is important for this study considering
option for the furnace (from only about 33% with the reference biomass electrolyzers produce up to 120 mtpa, equivalent to almost 5500 TWh
potential). Note that in EU27, there are already almost three times as of electricity input in a year. This (large) electricity consumption for the
many electric arc furnaces as there are blast furnaces (232 vs. 88 for electrolyzer is in line with [170] that estimates 6200 TWh for electro-
2013 [107]). Therefore, decarbonization of electricity could lead to a fuels. However, this considers no hydrogen for transport and 100% for
potential reduction of the steel CO2 footprint limited by the availability electrofuels production.
of scrap metal (used for electric arc). However, electrowinning (solu- Hydrogen distribution. In terms of delivery pathways, the fraction
tion or suspension in acid or alkaline solution) [145] is another option for transport is delivered through compression, centralized storage,
to electrify the primary steel production. The complementary tech- distribution and refueling in gas-gas stations at a cost between 4.6 and
nology (to direct reduction) is carbon capture, which is also affected by 6 €/kg. There is no use of liquefaction and delivery of liquid hydrogen
the potential use downstream. In ambitious scenarios where hydrogen in any of the scenarios. Use in steel follows a similar pathway with
constitutes 18% of the final energy demand and allows reducing compression, transmission and distribution pipelines (∼3.6 €/kg). Use
6 GtCO2/yr on a global basis, steel only shifts around 10% (global basis) in PtL, which represents the largest demand when there is no CO2
to this production method [183]. Similarly, [175] estimates that less storage, is assumed to be produced directly where it is needed, similar
than 5% of the steel demand is satisfied with this route. to the current case in refineries. This PtL fraction can be up to 50% of
Hydrogen for PtL. For the scenarios without CO2 storage, PtL be- the demand. Refer to Appendix F for the delivery pathways for the main
comes attractive and it is the dominant component of hydrogen de- scenarios.
mand. These options (storage/use) are not mutually exclusive, but PtL
is only enabled when the most attractive (i.e. lower cost) option (sto-
5.4. Price and demand relation by sector
rage) is not possible. Hydrogen demand can reach up to 70 mtpa for a
scenario with a large biomass potential since it promotes the use of BtL
Higher relative cost to decarbonize transport and industry (in the
and the downstream use of the CO2 for PtL (requiring hydrogen).
Hydrogen storage becomes larger for higher VRE potential since it al-
lows bridging the daily pattern gap by solar, enabling to operate the 18
CO2 flows from ammonia are small compared to the emissions in the entire
electrolyzer with large daily load swings, while still satisfying the de- system, where emissions from NH3 production are in the order of 11 mtpa,
mand. This is a consequence of the large hydrogen flows (electrolyzers while total emissions are 228 mtpa for 95% CO2 reduction.

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Fig. 8. Price – demand curve for hydrogen in a scenario with 95% CO2 reduction, no CO2 storage and high VRE potential.

absence of CO2 storage) makes these sectors more resilient to higher commercial and residential sector respectively.
hydrogen prices. Interaction with CO2 price. The increase in CO2 price per every unit
This section presents changes across the system due to a variable of increase of hydrogen price is lower as the hydrogen becomes more
hydrogen price. For this, the hydrogen demand was detached from the expensive (see Appendix F). This means the largest CO2 price increase is
supply side by providing an external constant price. This was done for a almost 150 €/ton for the change from 2 to 3 €/kg of H2, while the in-
scenario with 95% CO2 reduction, no CO2 storage (to have PtX as part crease from 6 to 7 €/kg of H2 causes an increase of 50 €/ton in the CO2
of the hydrogen demand) and high VRE potential (with a larger need price. This occurs since hydrogen demand decreases and the part of the
for flexibility in power). The price – demand curve is depicted in Fig. 8, system that becomes more expensive also becomes a small fraction of
where the hydrogen price represents only the production cost with the the total (with increasing hydrogen price). Higher CO2 price also leads
distribution cost varying depending on the sector and pathway chosen. to the use of more expensive resources for electricity. Particularly, the
Additional results are presented in Appendix F. use of wind and solar in places with a lower capacity factor, that
Demand at high prices. Two sectors that are prominent even at high translates into a higher cost. This, in combination with the use of more
hydrogen prices are PtL and transport. Even with 7 €/kg (plus dis- efficient (expensive) options for road transport, causes an increase in
tribution cost for transport), demand for these sectors already amounts total annual investments in the system by up to 1%.
to almost 60 mtpa. Demand in transport is mainly (80%) in heavy-duty Drivers for hydrogen price. The hydrogen price is a result of the
trucks, driven by the fact that hydrogen is a zero tailpipe emissions fuel combination between CO2 and fuel prices. In scenarios with CO2 sto-
that displaces fossil fuels in spite of the higher (+30%) cost for the rage, the CO2 prices are (on average) lower (350 €/ton for 80% CO2
truck itself. PtL demand is driven by aviation (around 45 mtpa of hy- reduction) resulting in lower hydrogen prices in the range of 2.5–3.4 €/
drogen if satisfied fully with PtL) and by the fact that diesel trucks (even kg with the lower bound corresponding to cheaper methane (∼15 €/
more efficient ones) are cheaper than hydrogen ones (see Table 12 in GJ), which is the main source for hydrogen. When there is no CO2
Appendix A). This leads to a compensation of the lower pathway effi- storage, CO2 prices are higher (1000–1400 €/ton) and this is reflected
ciency by a lower CAPEX. The last sector to have a demand with the in the hydrogen price that reaches 3.8–5.7 €/kg. For these scenarios,
highest hydrogen price considered is industry. With a hydrogen price of electrolysis is the main technology used and changes that produce
7 €/kg around 50% of the steel demand is satisfied with direct reduc- cheaper electricity also result in cheaper hydrogen. The use of higher
tion. VRE potential can decrease H2 price by 1.4 €/kg, while the use of op-
Demand at low prices. Up to 5 €/kg, these three sectors have mar- timistic PEM performance (see Table 4 in Appendix A) can decrease the
ginal increases in demand, with the largest change in steel where hy- cost by 0.3–1.4 €/kg with the larger change associated to more re-
drogen increases its share to satisfy two thirds of the demand. At prices stricted scenarios.
below 4 €/kg, PtM starts being attractive. The additional gas covers Impact on other commodities. Hydrogen price also has an indirect
35% of the gas demand for a 2 €/kg hydrogen price, with most effect on biomass use. With lower hydrogen prices, the cost for elec-
(80–90%) of the extra gas used for heat production, either through trofuels is lower and reduces the share of BtL. This enables biomass use
boilers for industry or CHP for district heating. Use in the residential for other sectors, especially power (through gasification). A similar
sector (through µ-CHP with fuel cells), becomes significant at 3 €/kg, effect takes places in the power sector, where PtM becomes more at-
while use in the commercial sector does not start until it reaches 2 €/kg. tractive at lower H2 prices and displaces the more expensive VRE re-
In terms of market share, a price of 2 €/kg, translates into a 2.5 and sources with the lower cost gas (see Appendix F).
14% share of the heating demand satisfied with hydrogen for the

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Fig. 9. Technology mix for diesel production and consumption sectors across main scenarios.

5.5. Diesel and jet fuel balances electricity-based, a maximum share of 80% was used. This leads to the
remaining 20% being covered by a mix of hydrogen, BtL and diesel,
These two represent the largest liquid fuels demand for its use in where the latter comes mainly from PtL.
transport and the main fuels produced by PtL when it is present in the Diesel demand (95%). For the 95% CO2 reduction scenario, bio-
system. Therefore, it is important to understand what the dynamics mass combined with CCS, enables negative emissions and the possibi-
with competing alternatives are and when PtL prevails over other op- lity for positive emissions in both diesel and jet fuel. This has also been
tions. This is linked to where these are being used (specifically for diesel seen in previous studies [184]. The largest difference (with respect to
since jet fuel only has aviation as end use sector) and highly linked to 80% CO2 reduction) is that the higher CO2 prices drive heavy-duty
the use of biomass (next sub-section). The balance for diesel is shown in transport to use hydrogen, which becomes 50% of the demand, de-
Fig. 9, while the jet fuel balance can be found in Appendix E, but it is creasing diesel demand by more than 1 EJ.
also discussed below. BtL/PtL synergy. With no CCS, PtL becomes attractive.
The preferred energy carrier in transport is electricity, complemented by Furthermore, for the high biomass potential or 95% CO2 reduction, BtL
hydrogen in applications that are more difficult to electrify (i.e. heavy-duty also arises as supply option. A disadvantage of BtL is that the energy
trucks) and synthetic fuels in aviation. PtL acts as a complement of BtL efficiency is relatively low (∼40%). The fraction of the biomass that
increasing its carbon efficiency to produce more liquid fuels. can be used for BtL is between 4.4 and 17.4 EJ (reference and high
Diesel demand (80%). The 80% scenario with no restrictions is the potential), which translate into 1.8 and 7 EJ of liquid product.
one resembling the most the current state. Direct import of refined fuels Therefore, when the reference potential is used, wood and forestry re-
represents almost 50% of the supply, while the other major source is sidues are mostly used for jet fuel rather than diesel. Most of the benefit
through internal refining activities (with imported oil). The share of is actually for the CO2 produced (70% of the carbon in the biomass),
biofuels is more modest at only 14% of the supply. Heavy-duty is the used downstream for PtL, which in turn constitutes 50–65% of diesel
largest demand, which is in turn satisfied 90% with diesel. This scenario supply. This is in agreement with previous studies [187]. With a high
uses more efficient trucks, but no fuel change yet. As basis for com- biomass potential then there is enough biomass to enable BtL for diesel
parison, the diesel demand for 2015 is in the order of 7.5 EJ. The largest production directly. This makes available more CO2 used for PtL and
drop in demand (initial demand close to 3.5 EJ) is associated to private the overall diesel demand doubles exploiting this effect and the fact that
cars, which shift mostly (60–70%) to electricity. This is followed by diesel trucks are cheaper. In this case, PtL is needed since there are no
light commercial vehicles (1.6 EJ), which completely change to elec- negative emissions from biomass plus CCS (no CO2 storage). The
tricity as well and buses (0.5 EJ) that shift to hydrogen. For jet fuel, it is combination of these factors leads to an installed capacity of almost
mostly (> 95%) satisfied with import and refinery output since the CO2 600 GW across EU28+ producing almost 6.7 EJ and satisfying 50–60%
target is not so strict as to promote non-fossil options for this sector. In of diesel and 60–90% of jet fuel demand. Another option that arises
cars, the benefit of lower CO2 footprint and higher pathway efficiency with a broader scope (than energy only) is a positive effect of agri-
prevails over the cost increase for higher electricity network cost. To culture, forestry and other land use (AFOLU) that could compensate
avoid an overly optimistic scenario where almost 100% of the cars are higher emissions in the energy system. This is the effect seen in IPCC

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reports (AR5 – WGIII [174]) where the scenarios with no CO2 storage maximizing the use of biofuels. This leads to 30–80 bln€/yr higher
has positive emissions from energy compensated by negative emissions annual cost. The relative flexibility diesel has is that it can be sub-
in AFOLU. stituted by electricity, hydrogen or LMG in its uses, while aviation de-
Jet fuel supply. For aviation demand (see Fig. 20 in Appendix E), mand has limited choices and the use of BtL without a downstream use
there are 3 combinations. For scenarios with CO2 storage, it turns out to for the CO2 limits the carbon-neutral fuel in the system.
be better to use biomass in combination with CCS and achieve negative
emissions elsewhere in the system to be able to have positive emissions 5.6. Biomass balance
in aviation. Therefore, in scenarios with CO2 storage, jet fuel demand is
satisfied mostly with import (fossil oil outside EU). Once CO2 storage is The energy system will use most (∼95%) of the biomass potential below
limited, PtL becomes attractive, CO2 from biomass can be used to 12.5 €/GJ since it is considered carbon-neutral. There is a need to define the
produce jet fuel. In a scenario with 80% CO2 reduction and no CO2 potential that still ensures the carbon neutrality of that biomass.
storage, part of the supply (60%) has shifted to PtL, with the remaining As highlighted before, biomass has high importance due to its
40% still being satisfied by import. The last scenario is one where there possibility to satisfy demand with (close to) zero net emissions.
is no CO2 storage (enabling PtL) with a stricter (95%) CO2 target. This Therefore, this section aims to understand the dynamics defining its
makes necessary BtL (as source for jet fuel). distribution among the different sectors. For this, Fig. 10 shows the
Fuel choice for heavy-duty transport. With regards to diesel (see supply and demand across the main scenarios, whereas insights from all
Fig. 21 in Appendix E), the largest swing sector is heavy-duty transport. the scenarios are included in the discussion below. This includes 13
BAU still has trucks running on diesel, when the CO2 reduction target is scenarios that deviate from the reference potential.
increased from 48 to 80%, LMG arises as potential option composing Biomass allocation. At a first glance, the use of biomass seems
40% of the fleet, while decreasing further the CO2 emissions to 95% of balanced across sectors. On a closer look, each type of biomass is as-
their original level, makes hydrogen more attractive (50% of the fleet sociated to specific sectors with only the wood and forestry having a
with only 20% LMG, 10% biodiesel and 10% import). When there is no more complex set of variables to define its end use. Industrial and
CO2 storage available, the sector is mostly (70%) dominated by hy- municipal wastes are mainly used for the commercial sector and re-
drogen complemented by diesel (from PtL and BtL). LMG is not at- sidential sector (60/40 split). Rapeseed and biodiesel displace its oil-
tractive anymore since it results in tailpipe CO2 emissions and PtM is derived counterpart. Bioethanol and sugar crops are blend with gaso-
not attractive enough to produce LMG from PtM product as value chain line for private transport. Biogas is used for industrial heat generation
(see [21] for a more detailed discussion on PtM). Diesel contribution is and in case no coal is allowed this is more than 95% of its use. The
more dependent on biomass potential than on PtL performance. When complementary use is for electricity production, which becomes more
the potential is the highest, diesel can increase its share to satisfy up to relevant for stricter scenarios. Biogas upgrading with either PtM or
90% of the demand, while changes in PtL performance only change carbon capture is hardly used, except for the scenarios that combine a
diesel contribution by 10%. All these options are rendered not attrac- high biomass potential with cheap hydrogen (better PEM performance).
tive if an electric alternative for the trucks is introduced, in which case This is in line with current use comprising close to 60% for electricity
the share of electricity is between 70 and 100% for this sub-sector. This and 30% for heat production, with only around 10% of the biogas in-
is in agreement with previous estimates by IEA [175] that show the jected to the grid and most of it having specific users [188]. For wood
same order of preference for diesel, hydrogen and electricity as energy and forestry, the primary use is for hydrogen production followed by
carriers as the scenario becomes more restrictive, with diesel at around electricity (close to 70/30 split) in scenarios with CCS. However, when
5–10% of the fleet for a below 2 °C scenario. there is no CCS (and CCU possibility) and high (95%) CO2 reduction,
Effect of different PtL performance. A sensitivity analysis was done then BtL becomes the main alternative. Its share is around 60% for 95%
(see Appendix G for results), assessing the impact for ± 150 €/kW CO2 reduction and no CO2 storage and increases to 80% as PtL becomes
change in CAPEX and +5/−10% points in efficiency (due to differ- more limited (e.g. lower efficiency) or only 20% as PtL becomes more
ences in heat integration). The largest effect was due to the efficiency. attractive (e.g. cheaper hydrogen). BtL is also enabled by a higher
PtL installed capacity changed around 10 GW (from a reference value of biomass potential. BtL has a low (∼30%) carbon efficiency, which
almost 430 GW19) with every percentage change (both directions). A means there is more carbon available for PtL than carbon directly in the
150 €/kW increase in CAPEX led to 50 GW lower installed capacity, BtL product. Direct use for industry only occurs for relatively low CO2
while a decrease by the same magnitude only increased capacity by targets (BAU and 80%) or when the potential is the highest. For sce-
25 GW. The combination of both lower CAPEX and higher efficiency led narios with a low biomass potential, the amount of biomass used for
to 530 GW of installed PtL capacity. Even though the changes in CO2 hydrogen production has the highest reduction in comparison to the
use were relatively small, these made a large difference for the other reference potential (∼80%), followed by industry (∼65%) and power
CO2 use option (i.e. PtM). When PtL efficiency was 8–10% points lower, (∼12–25%).
PtM capacity increased by 2.5 times from 27 to 67 GW, but it still re- Potential used. Almost the full potential is used across scenarios for
presented less than 14% of the CO2 use. The best PtL performance can the various levels of biomass explored (7–25.5 EJ/yr). Even in the less
lead to lower annual cost by 25 bln€/yr with relatively modest decrease strict scenario (80% CO2 reduction), over 95% of the potential below
in marginal CO2 price of 15 €/ton. When PtL performance was con- 12.5 €/GJ is used. Only for stricter scenarios (95% CO2 reduction with
servative (see Table 10), combined with a low biomass potential no CO2 storage) part of the more expensive sources (e.g. rape seed) are
(∼7 EJ/yr), then it is the point where atmospheric capture starts to be used for ethanol, leading to almost 95% use of the full potential. This
necessary for the system. At this point, < 1% of jet fuel demand is sa- implies the use of even the most expensive sources, which are up to
tisfied through this route, but any negative changes (e.g. increase in almost 30 €/GJ (compared to an average price of 6 €/GJ for the full
demand, lower CO2 emissions) will make this need larger. potential). For scenarios with high biomass potential, almost all of it is
Failure to develop PtL. When PtL is not available (e.g. for social used. Starch, sugar and crops (leading to 1st generation biofuels) and
acceptance issues or resource scarcity), it is substituted by mostly LMG more expensive than 8–10 €/GJ are not used. Accordingly, biomass use
in heavy-duty transport. This halves diesel demand to around 1 EJ (for is between 22.5 and 23 EJ/yr and it is 1 EJ/yr lower for the scenarios
95% CO2 reduction). At the same time, around 30% of the aviation with higher VRE potential. The higher potential is mainly driven by
demand needs to be satisfied with import (outside EU), while higher availability of wood products, which is a versatile category given
that it can be used in all sectors (see Fig. 4). Therefore, an increase in its
quantity still keeps the flexibility to change its allocation depending on
19
Scenario P2GF95CCSVRE, which is Nº 27 from Table 17. the constraints.

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Fig. 10. Biomass potential use by category and sectorial use across main scenarios.

CO2-neutral emissions. Biomass (together with PtL using DAC) is possible higher emissions in transport, decreasing the need for PtL and
one of the critical alternatives for net zero emissions for aviation and therefore hydrogen. However, when no CO2 storage is possible, a higher
navigation (which do not count with an electric or hydrogen alter- biomass potential hardly affects the total hydrogen flow, but instead
native). In the balance of CO2 emissions (see Appendix H), these two increases the share for PtL use since there is more CO2 available from
sectors reach up to 60% of the (tail pipe) emissions (for 80% CO2 re- BtL (+50%).
duction) and can only be compensated if the CO2 was originally sourced
in the air or if they are compensated by negative emissions elsewhere in 5.7. CO2 sources and sinks
the system. CO2 originally from air can be obtained through biomass,
namely BtL and hydrogen production (with gasification) when CO2 Biomass-based processes combined with carbon capture are needed in
storage is not possible. BtL emissions would become significant if there low-carbon scenarios, either for negative emissions or to provide CO2 for
were no CO2 sinks since the process needs to remove CO2 to adjust the downstream use. The role of direct air capture can be significant if it reaches
H2/CO ratio needed for Fischer Tropsch. These emissions could be as a level of 300 €/ton and 7 GJ/tonCO2 of energy consumption.
high as 350 mtpa (more than the total emissions allowed for 95% CO2 PtL is an alternative for CO2 use and for maximum abatement the
reduction) in case there is no sink (although these emissions would be CO2 would come from air (direct capture or biomass). This section aims
carbon neutral). BtL with carbon capture can use the carbon twice to to explore what the sources of CO2 for PtL are, how these flows change
satisfy transport demand, directly in the BtL process and by providing for different scenarios and the competition with other possible sinks for
the CO2 for PtL. At the same time, BtL is favored by PtL by further using CO2. Fig. 11 shows the sources and sinks for CO2 across the main sce-
the CO2. Ultimately the CO2 is released through the PtL route, but at narios.
least fossil fuel is displaced. To provide bio-derived fuels, one of the two CO2 storage. The low-carbon scenarios with CCS have the largest
(storage or use) needs to be possible. PtM does not provide the same CO2 flows with nearly 1.4 GtCO2 captured and stored underground. To
flexibility since the relative size of marine transport is smaller (in terms put this in perspective, currently there are 21 projects in operation or
of energy demand). The critical factors about aviation and navigation under construction that capture 37 mtpa with most of the experience
are that their demand will greatly increase in the coming decades, more being in EOR (Enhanced Oil Recovery) rather than a dedicated under-
than tripling on a global level by 205020 [175] and the other is the ground storage [190]. Another standard to add some perspective is the
absence of electricity and hydrogen. Hydrogen has been identified as a expected CCS contribution in future scenarios. IEA estimates CCS con-
main carrier in deep decarbonization scenarios, although it cannot be tribution will be 6.8 GtCO2/yr to stay within 2 °C increase and
claimed to be the best alternative [189]. 11.2 GtCO2 for 1.5 °C [175]. Although these numbers are for 2060 and
Competition with hydrogen. Biomass can be a competitor or enabler on a global level, they show the importance of the technology con-
depending on the scenario. If CO2 storage is possible, a larger biomass tribution. Consequently, 1.4 GtCO2 is a challenging target given the
potential will lead to a greater use for hydrogen production becoming current progress, infrastructure development [191] and investment
the dominant source, but the net hydrogen flow in the system will be needed to achieve such order of magnitude. The more ambitious CO2
lower due to the negative emissions achieved by biomass, which make target leads to more than 30% increase in the CO2 stored since there is a
larger need for neutral and negative emissions mainly to compensate
for the emissions in transport. CCS leads to lower system cost at the
20
Aviation demand is expected to grow by at least 4–5%/yr and navigation expense of prolonging the use of fossil fuels in the system, which are the
has experienced over 10%/yr growth since 2000. main source for hydrogen and most of their use in power is with CCS.

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Fig. 11. CO2 sources and sinks across main scenarios.

CO2 sources are balanced across sectors with similar shares for power industry itself, since it reduces its specific emissions, but the contribu-
and hydrogen and a smaller role for industry. BECCS supplies between tion to the overall CO2 reduction is limited. The use of carbon capture in
30 and 40% of the CO2 with the reference potential, while it can pro- cement can have a high energy penalty (5 MJ of additional energy per
vide almost 75% of the CO2 with the highest biomass potential. In spite kgCO2 captured and a CO2 penalty of nearly 0.5 kg CO2 per every unit
of the relatively low BECCS contribution from power, it makes a big of CO2 captured [192]).
difference in the electricity footprint. The zero operational emissions Drivers for CO2 use. The main driver is transport since other sectors
from renewables combined with these negative emissions lead to a can be satisfied with hydrogen or electricity. Demand in the transport
footprint between −10 and 5 gCO2/kWh for most of the scenarios and sector is around 5, 4, 2 and 0.5 EJ for heavy-duty trucks, aviation,
it can reach −100 gCO2/kWh for scenarios with high biomass poten- marine transport and buses respectively. Assuming marine transport is
tial. This effect is not necessarily due to a high BECCS contribution satisfied with LMG, while the rest of the sectors are satisfied with PtL
(although it reaches 10–11% of electricity production in scenarios with products, this establishes the upper bound of 800 MtonCO2/yr that
high biomass potential), but because there are hardly any positive could be used. However, in the scenarios analyzed, two major devia-
emissions besides the occasional use of gas turbines. tions from this maximum use is the use of hydrogen for heavy-duty
Sources of CO2 used. This is drastically changed when CO2 storage trucks (which is the preferred (70%) energy carrier when there is no
is not allowed and the flows are reduced to between 200 and 500 Mton/ CO2 storage and 95% CO2 reduction) and the supply of jet fuel by BtL or
yr. One reason for this is that CO2 that goes in either PtL or PtM will import, which can be dominant for scenarios with higher biomass po-
ultimately end up in the atmosphere and the biomass potential is not tential (BtL) or with CO2 storage (import). Another reference for CO2
high enough to sustain a level above 1 GtonCO2/yr in a carbon-neutral use is the substitution of fossil-based feedstock for the chemical in-
way. CO2 is used preferentially for PtL and only marginally for PtM, dustry, which is estimated to have an upper bound of 290 MtonCO2/yr
since the gas demand itself is largely reduced and hydrogen used as feed [137]. The same study [137] also estimates that 380 MtonCO2/yr are
is too expensive to use for methane in most scenarios. Wood, forestry needed to satisfy the fuels demand foreseen in the 2 °C scenario by IEA
and grassy crops are the most versatile sources that can be used across ETP [175] for the transport sector. Currently, the global market for CO2
sectors and that have the possibility of CO2 capture in downstream uses. use is ∼200 MtonCO2/yr, mainly for urea and inorganic carbonates
For the reference biomass potential, these sources would amount to (120 and 50 Mton/yr respectively) [193].
350–450 MtonCO2/yr if all would be processed with carbon capture DAC. Direct CO2 capture from air is not shown in Fig. 11 since the
(depending on the route followed). When the potential is the highest base assumption is that there is limited improvement in technology
(Biomass economy), this increases to almost 1700 Mton/yr. Therefore, performance until 2050. However, if DAC is promoted and reaches a
only when the potential is the highest a similar CO2 flow as the ones performance of 300 €/ton and 7 GJ/tonCO2 of energy consumption, it
seen in low carbon scenarios could be sustained. Over 85% of the CO2 can be an important component of future low-carbon systems. Its de-
comes from biomass and ensures that the liquid produced downstream ployment is seen in scenarios with high CO2 target (95%), possible CO2
is carbon neutral. However, there is a small (∼7%) contribution from storage and reference or low biomass potential (10 EJ/yr). The pathway
fossil fuels in power generation. The model does not include the match of air capture for downstream use for electrofuels is very limited
between sources and sinks, but instead assumes the production and use (< 10 Mton/yr). This occurs since these pathways include the CAPEX
of a common commodity. This would be the equivalent of a grid where for air capture (300 €/ton), the CAPEX for upstream heat and electricity
all the producers and users are connected. To allocate specific sources, a consumption of this unit (indirectly reflected as commodity price),
model with higher spatial resolution is needed. CAPEX for hydrogen production (electrolyzer) and for the liquid
One of the sectors providing CO2, both when there is the possibility synthesis step. Therefore, this makes this option (of DAC plus CO2 use)
for CO2 storage and when it is absent, is cement. Its flow is relatively too expensive and DAC mostly arises in combination with CO2 under-
small compared to the downstream use in PtL. It is more relevant for the ground storage. Capacities of over 400 Mton/yr of CO2 were observed

634
H. Blanco et al. Applied Energy 232 (2018) 617–639

for the 95% scenario (with CO2 storage and a biomass potential of in sectors which are more expensive to decarbonize. Biomass gasifica-
10 EJ/yr). With a high biomass potential, there is enough carbon-neu- tion for hydrogen production and liquid production (Fischer Tropsch)
tral CO2 and there is no need for DAC. are the dominant CO2 sources for scenarios with limited underground
CO2 use impact on system efficiency. It has been argued [194] that storage. Demonstration projects that include carbon capture in these
PtL actually leads to a net CO2 increase compared to fossil alternatives processes are necessary, especially to further develop concepts where
and to higher energy consumption [191] with conventional oil having carbon use is maximized by additional hydrogen. Specifically aviation
around 20 EROI (Energy Return On energy Invested) [195], while PtL drives the need for Power-to-Liquid, where a major advantage in the
will have an EROI lower than 1 leading to an increase in primary energy end use sector is minimal changes to existing infrastructure. PtL acts as
consumption. This is still relevant as long as there are targets for pri- a complement to biofuels rather than a competing alternative. When
mary energy consumption [196], but it could be less relevant in the PtL is used, it satisfies between 60 and 90% of the aviation demand and
future when there is abundant supply of electricity from RES. For all the 50–60% of diesel which contributes to EU energy security and reduc-
scenarios explored, the CO2 constraint was binding and dominant over tion of the energy-related import bill.
the primary energy consumption. This study should be complemented with a higher temporal (to
study electricity grid stability and generation ramping) and spatial
6. Conclusions (potential spots with electricity grid congestion) resolution to better
assess the potential of multi-carrier energy systems. The potential fuel
This study addressed uncertainties about future configurations of the shift in aviation and navigation should also be complemented by trade-
energy system by running an extensive parametric analysis for scenarios offs with energy efficiency and mechanical design. More options for the
that achieve 80–95% CO2 reduction by 2050 (vs. 1990). Among the petrochemical industry like bio-based feedstock should also be ex-
insights developed from the results is that hydrogen acts as complement plored. Better wind and solar resources outside EU could also be
to electricity and grows as more constraints are added to the system. exploited to produce electrofuels at lower cost. This involves the trade-
Action is needed to close the gap between the current focus on re- off between lower production cost vs. additional cost for transport and
newable hydrogen for refineries and fuel cell vehicles to cover appli- decreased energy security, GDP (through investment) and job creation
cations like steel and heavy-duty transport, as well as to close the gap in [151,197]. Ammonia as potential energy carrier for sectorial integra-
deployment to kick-start and accelerate the cost decline of the tech- tion should also be evaluated in future studies.
nologies. The extent to which PtL is built will be mainly defined by
policy adoption on CO2 storage (CO2 use is favored by absence of sto- Acknowledgements
rage) and biomass availability (more neutral CO2 to be used).
The three largest drivers for hydrogen are limitations on CO2 sto- The authors would like to thank Alessandra Sgobbi (EC – DG
rage (e.g. social acceptance), low biomass potential (depending on CLIMA) for comments on an earlier version of the document that pro-
sustainability criteria) and low technology cost. With limited CO2 sto- vided valuable insights enriching the approach and content of the
rage, hydrogen can only be supplied by electrolyzers, which could re- publication.
present almost 50% of the electricity demand. Operational limits for the
flexibility of electrolyzers including their response time should be va- Appendix A. Supplementary material
lidated since they play a large role in dampening VRE fluctuations.
Attention to demonstration projects should be focused not only in Supplementary data to this article can be found online at https://
transport, but also in industry. Steel proved to be one of the key sectors doi.org/10.1016/j.apenergy.2018.09.216.
that shifts to hydrogen for restricted scenarios with up to 25 mtpa
(3 EJ/yr) of hydrogen demand. Heavy-duty transport seems to be a References
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