Carbon-free gasoline sounds like an oxymoron. Gasoline from refined petroleum remains one of the primary emissions sources across the world due to widespread utilization of diesel and gasoline-powered automobiles. Innovators in the energy sector have not only worked to reduce the harmful pollutants that come from burning gasoline, but now stand to benefit from a new technology that utilizes already existing carbon in the atmosphere as a fuel source. These new synthetic fuels can be used to power existing automobiles, aircraft, and serve as a transition fuel for the transportation sector as more efficient renewable energy sources are developed.  

This liquid synthetic fuel is manufactured via direct air capture (DAC) by removing the carbon from the atmosphere and combining it with hydrogen from water to produce a carbon-neutral burning fuel. This cost-efficient process utilized already existing industrial processes to scale-up the amount of carbon that could be captured from the atmosphere, while keeping costs below $100 per ton. Synthetic fuels could have the potential to remove up to 2.8 gigatons of carbon from the atmosphere, while also reducing the costs of ownership for a single hybrid car. These synthetic fuels would be a major boon to companies in countries that level a carbon tax or similar pollution fee for emissions. In the U.S., the state of Washington has a ballot initiative to institute a carbon fee, which would make it the first U.S. state to do so, opening the door for that state’s transportation sector possibly switching to synthetic fuels.  

By recycling existing carbon from the atmosphere as a fuel source for vehicles, the transportation sector can cap the amount of emissions from its sources. This would create a circular economy, where waste from one industrial product serves as fuel for the same industrial process. Transportation has long been the most difficult sector to decarbonize, due to the designs of most automobiles requiring a compact, liquid energy source. Synthetic fuel development plans have the backing of several industrial firms, including Siemens, Shell, Volkswagen, and ThyssenKrupp.  

Many of these synthetic gasoline machines follow the same basic operational pattern. The carbon dioxide is extracted from the surrounding air through a filter, while water in another container is split, producing hydrogen. The captured CO2 and hydrogen are fused together to make hydrocarbons: the same carbon that makes up all fossil fuels pulled from the Earth. Stability is the hurdle facing synthetic gasoline production, with the smallest machines being able to produce 7 liters of fuel costing 10 kilowatts (kw) and the larger and more efficient machines being able to produce 200 liters of fuel for 200 kw. To be marketable, this synthetic gasoline will need to continue to cut costs, but even now there exists potential niches for synthetic fuel to cap emissions.  

Several pilot projects across the world exist to begin testing the scalability and fuel efficiency of synthetic gasoline. The Haru Oni project in Chile is the world’s only commercial plant for carbon neutral gasoline production. It currently produces just under 130,000 liters, but is expected to reach 550 million liters in 2026. British Columbia, Canada-based Carbon Engineering currently has plans to construct a commercial plant that will produce 200 barrels of synthetic fuel per day.  

Other DAC operations seek to simply sequester and store carbon rather than reuse it. In this way, and while running on renewable power sources, they operate as negative emissions technologies. By capturing carbon dioxide directly from the atmosphere and pumping it into the ground, carbon is permanently removed and forms into rock below the surface. While this negative carbon enterprise is ideal for reversing the concentration of carbon dioxide in the atmosphere, it lacks economic value and a market.

As the industrial process for producing synthetic fuel becomes less expensive, the number of production facilities should increase. The current trend for research and development for synthetic fuels has been simplifying the multi-step hydrocarbon manufacturing processes and finding ways to reduce costs for the carbon capture machinery. Carbon-neutral gasoline and other synthetic fuels can provide a way to cap emissions in industries where fossil fuels are proving more challenging to replace. 


 Written by Roy Mathews, Public Policy Associate


The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.