The economy of Corpus Christi, Texas, is largely built on fossil fuels. A stone’s throw away from major oil and gas fields, the port city is home to dozens of fossil fuel companies. It exports more crude oil every year than any other city in the US. 

But Corpus Christi’s future fortunes, at least in the eyes of one startup, will be made off a fuel derived from carbon dioxide. If it can be scaled, that fuel could play a vital role in cleaning up the hardest-to-decarbonize portions of the transportation industry from aviation to heavy-duty trucking.

Since its Corpus Christi facility came online in October, Sacramento, California-based Infinium has become one of the first e-fuel makers in the world to turn industrial-scale production from a concept into a reality.

At its plant, electrolyzers break down water into hydrogen and oxygen, using electricity generated from nearby wind and solar farms. The hydrogen is then transported to a reactor, where it meets CO2 captured from local refineries, setting off a series of complex chemical reactions aided by patented catalysts. The result is a synthetic fuel with the same chemical properties as its fossil fuel-based cousins.

On any given day, Infinium produces nearly 8,300 liters of what’s known in the industry as electrofuel or e-fuel and distributes it to customers across the US. A slogan on the company’s trucks reads: “Clean fuels made from renewable energy and carbon dioxide.”

Hydrocarbons — compounds of hydrogen and carbon atoms — are the basis of crude oil that is turned into fuels to power everything from trucks to jets. But those atoms can be combined in an industrial setting and made into a substitute fuel that can have lower planet-warming impacts.

Aviation is responsible for more than 2% of the world’s greenhouse gas emissions. Freight transportation — done largely by truck, ship and rail — contributes another 8%. Both figures are expected to balloon in the coming decades as demand for travel and shipping increases while easily decarbonized sectors of the economy cut their emissions. Regulations such as the EU’s increased scrutiny of heavy-duty vehicles and its sustainable aviation fuel mandate are putting pressure on these industries to clean up their pollution.

With demand soaring, there’s a growing push to fast-track solutions, including but not limited to e-fuels. Practically nonexistent five years ago, the e-fuel market will reach nearly $50 billion by 2030, according to some industry estimates. 

Using electrolysis to make hydrogen-based products — the backbone technology for e-fuel — is not new. Factories deployed the technique to produce ammonia as early as the 1920s. Most of those plants were decommissioned in the following years as a cheaper alternative (converting natural gas and coal into ammonia) lured away customers. That alternative, though, is a major source of greenhouse gas emissions, while electrolysis done using clean energy is carbon-free. The tide may be turning again as a growing number of companies, ranging from airlines to freight truck operators, rethink their climate toll.

While commercial production of e-fuel is still in its infancy, “it’s getting a lot of interest,” says Rose Oates, an analyst with research firm BloombergNEF.

E-fuel can be a “dominant player” in decarbonizing transportation, says Robert Schuetzle, founder and chief executive officer of Infinium. The three-year-old startup has 13 more projects under development in Texas and elsewhere. 

At Infinium’s Corpus Christi facility, machinery works day and night to produce mostly e-diesel for trucking, alongside e-kerosene as a jet fuel and e-naphtha, which is commonly used as a solvent. If the facility runs at full capacity, it can make roughly 3 million liters of e-fuel each year. The company doesn’t break down the volume of each product, but if all of it was e-diesel, it would be enough to power one truck with a payload of 20-odd tons on 190 trips around the equator.

Amazon, which has pledged to zero out its emissions by 2040, has claimed a chunk of the fuel. While the e-commerce giant is increasingly electrifying its delivery vehicles, e-fuel is a “promising tool for reducing emissions” in freight transportation, says Chris Atkins, Amazon’s director of worldwide operations sustainability. That’s because e-diesel could deliver immediate climate gains without a massive infrastructure overhaul, he says.

Hundreds of miles away from Corpus Christi, Infinium is building another facility in West Texas to create sustainable aviation fuel. American Airlines has already agreed to buy fuel once production begins, likely in 2026, according to Infinium.

Governments worldwide have urged the transportation sector to reduce carbon emissions and offered generous incentives to help do so. With the cost of renewables dropping dramatically — solar, for instance, has fallen more than 80% since 2010 — e-fuel has become more technologically and economically feasible.

“The acceleration is happening,” says Schuetzle. Despite spending 15 years making alternative fuel from feedstocks including biomass and waste gas from the fossil fuel industry’s gas flaring systems, it wasn’t until 2020 that market appetite for e-fuel convinced him to launch Infinium.

“It’s still early in the game, but e-fuel will be a very dominant discussion point and platform for decarbonization of heavy transport and chemicals,” Schuetzle says. “Customers are really focused on buying e-fuel and paying a premium for the carbon abatement potential.”

E-fuel faces competition from biofuel made from soy and corn, which the transportation sector is increasingly adding to its fuel mix. Globally, biofuel consumption reached an all-time high of 170 billion liters in 2022, most of which was used in road transport, data from the International Energy Agency shows. By contrast, commercial-scale e-fuel makers are few and far between. Electric trucks are also hitting the road, adding another carbon-free option for freight operators. 

Neither of those is a perfect solution. Biofuel made from corn can worsen water scarcity and compete with food production. And much more charging infrastructure is needed to move large quantities of goods around with battery-powered trucks.

To achieve net-zero emissions globally, the IEA estimates that carbon emissions from heavy-duty vehicles has to drop 15% by 2030 compared to their current levels. E-fuel is one of the easy decarbonization solutions trucking companies could use to accelerate that effort.  E-fuel could also help decarbonize aviation. In fact, the United Nations’ International Civil Aviation Organization predicts that e-fuel will constitute as much as 55% of global jet fuel by mid-century, if technological advancements take place and governments enact supportive policies. Shipping — another industry with no easy climate solutions — could also benefit from e-fuel.

How Infinium fits into that future remains to be seen. Schuetzle is tight-lipped about the company’s exact plans. While acknowledging that Infinium’s e-fuel is “more expensive” than conventional fuel, he didn’t disclose the cost difference. Schuetzle also declined to share the amount of CO2 that would otherwise have been vented into the atmosphere if the Corpus Christi facility didn’t use it as feedstock, citing proprietary concerns, nor would he reveal the water footprint of Infinium’s plant.

Water is essential to producing hydrogen through electrolysis and it is a potential flashpoint with local communities. Infinium says that its water use is “very efficient.” When taking into account all the emissions from fuel production, processing, distribution and consumption, the startup says its product emits 95% less CO2 than conventional fuel.

It is “very close to a net-zero carbon fuel,” Schuetzle says.

But not everyone agrees on e-fuel delivering on its promises, particularly when the technology uses CO2 captured at smokestacks.

“It depends on how you count,” says Pierpaolo Cazzola, a research fellow at Columbia University’s Center on Global Energy Policy. Compared to releasing CO2 from fossil fuel-burning factories into the atmosphere, it is more climate-friendly to capture the carbon and utilize it in e-fuel production, Cazzola says. But that gas is only stored temporarily, he adds. Once e-fuel is combusted, it releases CO2 just as traditional fuel does.

“This is not CO2 neutral,” Cazzola says. “There would still be a net addition of carbon in the atmosphere.”

Some regulators seem to agree with that thinking. The EU will phase out government subsidies for e-fuel made with fossil fuel-sourced CO2 by 2041. For now, though, the gas captured at power plants and factories is a key source of feedstock for making e-fuel.

To address this issue, Infinium says it will source so-called biogenic waste carbon from paper mills or ethanol plants. Wood and plant waste contains CO2 naturally pulled from the atmosphere, which can help lower the resulting fuel’s carbon intensity. Infinium also plans to get carbon feedstock from companies removing CO2 from the atmosphere using a process known as direct air capture.

But that technology itself is nascent, and CO2 captured this way can cost hundreds of dollars or more per ton, which adds to the cost of making e-fuel. The supply of captured biogenic CO2 emissions has its own issues as resource-intensive paper mills and ethanol factories come with environmental sustainability challenges. 

Even if e-fuel makers overcome the supply chain obstacles, high price points make for an uphill battle against traditional fuels. Take kerosene, the fuel that keeps the world’s planes in the sky. Making e-kerosene from biogenic carbon emissions, water and renewable energy is at least four times more expensive compared to traditional fuel, according to the IEA. A drop in the cost of electrolyzers and renewable energy will help lower the price of e-kerosene, but it could still be double or triple that of its petroleum counterpart in 2030, the IEA says.  

And not every e-fuel is created equal. While e-diesel and e-kerosene can be “drop-in” solutions to decarbonize trucking and aviation that don’t require costly equipment upgrades, e-ammonia and e-methanol as shipping fuel cannot. The added costs to use those fuels will pose yet another hurdle.

Despite e-fuel makers promising a major scale-up this decade, it will make an “unnoticeable dent” in transportation emissions, says Oates at BNEF. “This is down to a combination of nascent technology and high cost of e-fuel production,” she adds.

The IEA estimates that more than 200 e-fuel projects have been announced around the world in recent years. Yet plants that have finalized investment commitments amount to less than 5% of the planned capacity. 

E-fuel production will also face a “double limitation” as it scales up, says Cazzola. Gaining access to abundant renewable energy and carbon-emitting factories is vital to producing e-fuel, yet the two resources aren’t often sited in the same location. Until direct air capture technology matures, that geographic constraint will persist, Cazzola says.

Schuetzle agrees that e-fuel makers “can’t do these projects anywhere on the globe quite yet.” But Infinium has identified some 20 locations worldwide with both resources for e-fuel production, he notes, and the company is in search of more options.

It’s not alone in trying to grow the industry. Twelve, another California-based startup, is building a plant in Washington state and recently fired up a new CO2 converter. In Norway, Nordic Electrofuel has announced ambitious plans to ramp up domestic production of e-kerosene, and so have companies in France and Germany.

But the future growth of e-fuel production is ultimately linked to the advancement of direct air capture. “That really helps us to go anywhere on the globe,” Schuetzle says.