“It’s only a couple of weeks away,” says Frithjof Engelke. “Then we will be celebrating our 100th anniversary.” At the oil dealer’s modest office in Berlin’s Tempelhof, it becomes immediately clear that Engelke is a man from the shop floor. He could just as easily be a mechanic or a truck driver. With an oil smear across his cheek and his work clothes on, we talk to him about the green energy transition that has enormous consequences for his company.
Engelke is the third generation to take over the reins at the Hans Engelke Energie company. It all started in the 1920s with the trade in firewood and coal. After the war, fuel oil was added and gas followed a little later. Today the company supplies electricity and wood pellets for fireplaces and stoves and has filling stations as well.
Although that does not sound very climate-friendly, Engelke thinks they are on the right track. “I’m not at all worried about our future in a carbon neutral world,” he says.
Road full of obstacles
But it is a road full of obstacles. “You have to remember that Berlin is a special case within Germany. During the Cold War, we were a kind of island in the middle of the GDR. There weren’t any electricity connections with West Germany. Everything was handled by themselves with their own power plants and large reserves of coal and oil just in case.”
As a result, many homes in Berlin are still heated with fuel oil to this day, a practice that hardly exists anymore in the Netherlands due to the transition to natural gas. Across Germany, there are still about 20 million households that heat with “Heizöl”.
“As such, fuel oil for heating is also important for us, but we know that it will become less so in the future.” The company is therefore banking on some obvious alternatives such as green electricity and wood pellets. But hopes are also vested in innovations in the field of synthetic fuels (eFuels) that can replace fossil fuels.
When Engelke talks about eFuels, his enthusiasm is palpable, but so too is his frustration. Engelke feels, just like many of his contemporaries in the sector, that politicians only seem to be interested in green electricity, without giving other CO2-neutral alternatives a serious chance.
Engelke thinks that politicians assume far too readily that green electricity is a solution for everything. “Imagine if all cars and households switched from fossil fuels to electricity then Germany would need three times more power than it does now and that doesn’t even include industry and transport. That power would also have to be all green. That is unlikely to ever happen, and certainly not at the pace the government has in mind.”
Engelke is therefore absolutely convinced that eFuels will play an important role in the energy transition. “We ourselves are involved in a new project in Frankfurt, yet there are more initiatives that we have a good feeling about.”
Ideally, Engelke envisages starting off by mixing eFuels with fuel oil, diesel and other refinery products. This can then gradually be expanded until the fuels are 100% CO2-neutral.
The advantage of eFuels is that they can be used in existing heating systems and combustion engines without any problems. That makes it attractive for us as a company, of course, but they can also help society as a whole to make the switch to electric cars much smoother. For freight traffic, it could even provide a permanent solution.”
eFuels in themselves are nothing new. First of all, green electricity is generated with, for example, windmills or solar panels. With this electricity and water, hydrogen can be produced by means of electrolysis. When that is combined with CO2 you get synthetic diesel, gasoline, methane or kerosene.
Two major advantages are climate friendliness and low emissions of particulate matter. Disadvantages are the rather high nitrogen oxide (NOx) emissions, the high costs and the loss of energy during the conversion process.
The project that Hans Engelke is taking part in together with the trade association UNITI hopes to mitigate some of these disadvantages.
This is a project run by the company Ineratec, a spin-off from the Karlsruher Institute of Technology (KIT), which has been specializing in eFuel technology since 2014. The company is on the verge of a breakthrough with compact and inexpensive eFuel plants that fit into a single shipping container. One plant can produce 350 tonnes of eFuel per year.
That in itself does not amount to much in the world of oil refinery. But the great thing about Ineratec’s mini-systems is that they do not take up a lot of space. That means that there is always a spare spot to be found on an industrial site. The capacity can also be easily expanded and they are also suitable for export.
Production abroad is vital for the success of eFuels, because everyone who appreciates this technology knows that there is a shortage of green electricity in Europe.
eFuels and hydrogen imported from abroad can offer a solution. Consider countries such as Chile, Morocco, Brazil, Spain, Egypt, Finland, Canada, Saudi Arabia or Malaysia that have great potential for green energy and relatively low domestic demand.
A few weeks ago, Ineratec completed a new financing round in which power company Engie, aviation company Safran and shipbuilder MPC, among others, are participating. The investment will be used to build the largest eFuels plant to date which will have a capacity of 4.6 million liters per year.
But there are more major projects afoot. The CEO of BMW, Oliver Zipse, said a few weeks ago during a visit by the German Minister of Climate Robert Habeck that eFuels and biodiesel are imperative to the success of the energy transition, since there will be cars driving around with internal combustion engines for decades to come. This is true even if the German government succeeds in meeting its goal of 15 million electric cars by 2030. After all, 30 million cars will still not be electric by then.
One of the most well-known eFuels projects stems from Siemens Energy, which, together with several partners including Porsche, Enel and ExxonMobil, has built a test plant (Haru Oni) in Chile with a capacity of 130,000 liters of synthetic gasoline and 450,000 liters of synthetic methanol.
The eFuel is being made with 3 megawatts of wind power. The aim is to gradually expand this project and follow it up in 2025 with a plant 100 times larger, good for about half a million cars.
Other companies that are conducting experiments include Lufthansa, Audi, BP, Bosch, Shell and Uniper. The hope is that as eFuel plants scale up, costs will come down. Right now, eFuel is still a lot more expensive than regular gasoline and diesel, but with economies of scale, the gap can be narrowed.
There is still a lot of apprehension within the German government and scepticism also prevails in the environmental movement. They would rather see things go full steam ahead where green electricity and electromobility is concerned. In their view, using green electricity for eFuels is inefficient.