German transport ministry paving the way

Electricity-based liquid fuels (power-to-liquid, PtL) are likely to play an important role when it comes to reducing transport greenhouse gas emissions, especially in the aviation sector, where, in the foreseeable future, PtL-kerosene could help overcome the lack of climate-neutral alternatives. And coupling products of PtL-kerosene could well be used for shipping and heavy goods transport.

Frontier advise throughout the project

In 2020, Frontier, in co-operation with Freshfields Bruckhaus Deringer as legal counsel and Nova Institute as technical experts, started advising the German Federal Ministry for Digital and Transport (BMDV) on a detailed study on the implementation of a funding design for industrial-scale PtL Kerosene products. The funding aims at reducing the costs of PtL production while also supporting the market ramp-up of PtL-technologies. The overarching goal, however, is to cut CO₂ emissions in the transport and especially the aviation sector. In August 2021, the BMDV invited PtL market actors to provide non-binding project outlines and to give constructive feedback on the design of the funding project. The results of these market tests are now available.

Great interest in the market test

The market test has fallen on fertile grounds among potential PtL-market actors: 16 detailed project outlines were received, containing both technical and economic parameters as well as constructive solutions to optimise the PtL-funding design.

Funding measure planned to start mid-2022

The market test data is now applied to help improve and implement the final funding design. The funding guideline is expected to be published in the third quarter of 2022, subject to prior notification to the EU Commission under state aid law.

It will serve as a legal basis for the funding. Each of the funding rounds will be launched by funding calls. The first funding call is currently being prepared and is intended to be published shortly after the funding guideline.

Frontier regularly advises on funding design in the transport and energy sector and in other sectors.

For more information, please contact us on media@frontier-economics.com or at  +44 (0) 20 7031 7000.