E-fuels have long been helping Europe decarbonise its rail network – and with Nordic Electrofuel recently signing an MoU for an e-fuel production plant in Saudi Arabia, Australia could soon follow in its tracks.
The plant, due to be built in 2030, is one of several Nordic Electrofuel is developing in the region, with a similar facility in Oman also in the works.
Once complete, the infrastructure will help meet future e-fuel demand from Australia – a market which Chief Executive Officer Gunnar Holen expects to be large.
“E-fuels are great for any country looking to decarbonise their transport networks,” he said.
“Unlike electric and hydrogen-powered trains, which cost millions, e-fuels can be used with existing diesel locomotives and don’t require new infrastructure.
“At the same time, they are a clean and carbon-neutral fuel, with proven efficacy in both rail and aviation.”
How are e-fuels developed?
E-fuels are synthetic fuels based on renewable energy.
“You start with traditional hydrogen production, then mix with captured carbon dioxide to create a gas,” Holen said.
“You then undertake Fischer-Tropsch and come out with fuels, which can be optimised for their various end uses. For example, e-kerosene for aviation.
“We also derive valuable byproduct from the oxygen, which we can sell for industrial purposes.”
While the Fischer-Tropsch (FT) process can be carbon-intensive, it has the potential to be carbon-neutral or even carbon-negative, depending on the source of its feedstock and energy inputs.
The carbon intensity is influenced by the source of the carbon and hydrogen used in the process.
The finished product, the e-fuel, is also carbon neutral and void of particulates.
“In rail, particulates, like soot, can be more damaging for the environment than carbon dioxide, so this is a key benefit,” Holen said.
Advantages
As well as being cheaper, e-fuels offer various advantages over clean transport alternatives.
While hydrogen trains are an attractive prospect to operators with larger budgets, Holen warns they are challenging to distribute and carry unique safety risks.
“There is a risk of explosion and, because of that, public caution around them,” he said.
“They also lack the necessary infrastructure. Back in the day, pure hydrogen-powered vehicles were promising in Norway. But the infrastructure hasn’t developed at all, and we only have a handful of filling stations.”
Electrification of the rail network is an equally popular clean transport option, but one which requires a supportive grid.
“If you have the time and the budget, great. Because there will be no emissions from an electrified train network. But for many, quicker, cheaper and more viable solutions are needed.”
Global developments
For these reasons, e-fuels have already become popular in Europe, with Germany representing its largest market, and Finland and Sweden set to become close contenders.
Holen said that as more plants open, e-fuels will become more cost-efficient and widespread around the world.
“We are currently developing several new plants here in Norway, including one we are looking to build equity for, in Herøya , 160 km South of Oslo. We also have plans to make a large fuel plant there.
“We are also extensively engaged in the middle East, working with the Royal Commission for Jubail and Yanbu in Saudi, as well as Canada and Sweden.”
While Nordic Electrofuels primarily deals with the European market, Holen believes APAC demand could soon catch up.
“In Europe, e-fuels are primarily used for fuel in aviation, given EU mandates around SAF [sustainable aviation fuel] and ESAF. It’s a strong market for us.
“But with our upcoming developments in Saudi and Oman, we will be able to cater more readily to the likes of Australia.”
Further insight
Sharing more on his expansion plans and weighing up the pros and cons of e-fuels in rail, Gunnar Holen will present at the upcoming Rail Decarbonisation and Resilience Conference, hosted by Informa Connect.
This year’s event will be held on July 22-23, 2025 at the Swissotel Sydney.
Key topics will include climate-adaptive design, asset resilience, emergency response, and cyber resilience, alongside solutions in clean traction power, alternate fuels, and energy-efficient operations.
Learn more and register your place here.
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