Perhaps e-fuels always will be more expensive - so what?
On this idea that e-fuels - artificially made petrols etc which are net zero emissions - may or may not be viable:
The process is convoluted, meaning mile for mile it will probably always be more expensive to make synthetic petrol rather than to use green electricity to charge a battery.
We think that probably there is carrying an awful lot of weight. But that’s also an irrelevance.
For the calculation is not what is the lowest cost of fuel per mile travelled. It’s what’s the lowest system cost per mile travelled. So it’s necessary to include the cost of the car itself. And of building out the infrastructure to do the fueling and so on.
But even that’s still not right. For the task before us - assuming that CO” and climate change are a problem that must be dealt with - is not to plan a net zero world. It is to allow to come to fruition the net zero world that us 8 billion consumers prefer.
That is, any solution which produces net zero is viable within that insistence of gaining net zero. Whether it’s bicycles, electric cars, e-fuels or the invention of teleportation. Any policy must therefore allow, on equal terms, any of those net zero possibilities to duke it out in the marketplace in order to find out which us 8 billion consumers prefer.
For that’s what markets do for us. Allow that consumer preference to make itself heard and thereby maximise consumer utility - the aim of all economic policy in the first place. Within, of course, that constraint of not causing significant harm to others through the externalities of the actions.
The implication of all of this is that no decision need be made upon e-fuels for the answer is obvious. Electricity into a battery is emissions free (whether the production of the electricity is or not is something to be dealt with at the level of the electricity production plant) and so are e-fuels into a car. Therefore both must be treated equally. Then see which consumers prefer.
Possibly some will prefer the ICE and the e-fuels, maybe near all will. Or those touted benefits of the EV will convince all. Who knows? The point here being that we’ve already got our method of working it out. Allow any method of meeting the net zero constraint to strut its stuff and see what people do.
You know, the marketplace.
Our suspicion - and it is not more than that at this point - is that e-fuels will be the winning solution to air travel, might be for cars and are likely to be a substantial minority of car choices at minimum. But as we say that’s a suspicion. The thing we know is that we’ve already the system to answer the question. That market suitably adjusted for externalities and a few decades are all that is required.