Porsche Investing in Synthetic 'eFuels'

Matt Posky
by Matt Posky
porsche investing in synthetic efuels

Despite Porsche transitioning to all-electric vehicles with the rest of Volkswagen Group, the brand believes that its customers will still want to drive around vintage gasoline models even after the European Union has banned them into oblivion. This is especially important for the iconic 911, which the company has repeatedly hinted would be one of the last models in its lineup to ditch internal combustion.

With countless racing series already devoted to classic examples of the car, Porsche wants to ensure there’s a solution for motorists who want to do more than pet theirs in a silent garage should the government introduce even stricter standards for automobiles than what’s already coming down the pike. So it’s revisiting alternative fuels — specifically a carbon-neutral alternative to gasoline that would work in traditional engines — from Chilean e-fuel producer Highly Innovative Fuels, with whom it’s already investing.

Porsche’s latest act of faith is valued at $75 million, which is far less than the hundreds of millions it has dumped into electrification. But it’s not a trivial amount, especially after the world seems to have forgotten about advanced biofuels like cellulosic ethanol. Introduced as a way to convert inexpensive organic waste into fuel after corn-based ethanol turned out to be far less energy efficient than hoped, cellulosic ethanol has had trouble getting off the ground due to its similarities. Advocates will claim that with more investments the process can be refined to a point where it becomes carbon neutral. But they’ve lost ground to the EV crowd that’s become singularly focused on tailpipe emissions, arguably leaving biofuels floundering since roughly 2015.

Highly Innovative Fuels (HIF) is taking a different approach that sounds a lot like alchemy, however. It’s working on developing synthetic alternatives to gasoline, rather than a biofuel that’s dependent upon breaking down plant waste. The company says it uses renewable energy sourced from wind turbines to leverage electrolysis to produce “green hydrogen.”

From there, captured CO2 will be combined with the lightest element on the periodic table to create various e-fuels. While hydrogen production has long been criticized as wildly inefficient due to the number of steps involved to get to a useable, storable product, HIF has expressed confidence that it’s going to be the one to change that.

But the resulting fuels won’t be going into hydrogen-powered Porsches. In fact, the automaker said the resulting product has to result in something that can be utilized by standard combustion engines to be of any real value to the brand. HIF is making fuels to replace existing petroleum-based propellants.

In late 2020, Porsche announced a roughly $24 million investment in a pilot plant being produced by HIF in Chile that’s expected to commence production later this year. Additional investments will result in the German automaker holding onto a 12.5-percent share of the company. Porsche’s goal is to ensure e-fuels are successful and see production in other parts of the world, ideally anywhere where there are 911s still hitting the racetrack. But the brand did say it doesn’t expect HIF to be in every market.

“E-Fuels make an important contribution to climate protection and complement our electromobility in a meaningful way. By investing in industrial e-Fuel production, Porsche is further expanding its commitment to sustainable mobility. In total, our investment in the development and provision of this innovative technology amounts to more than USD 100 million,” stated Barbara Frenkel, Member of the Executive Board for Procurement at Porsche AG.

Unless Highly Innovative Fuels has enjoyed a miraculous technological breakthrough, it’s difficult to trust that these e-fuels are going to be nearly carbon neutral. But they do represent another avenue for energy and are likely worthy of some exploration if there’s any legitimacy to what’s being claimed. Porsche and the rest of Volkswagen Group have been looking at renewable fuels for years and seem to think it has found itself a winner and cars are only the beginning. The company is already talking about utilizing e-fuels for shipping, aviation, and selling e-fuel byproducts to the chemical industry.

However, Porsche said the first step would be to use fuel coming from Chile in its motorsport flagship projects as a test case. From there, it would like to lean upon HIF to fuel vehicles rolling off assembly lines or stationed at showrooms. Though the company stated that its ability to acquire a stake in the company’s Delaware-based holding company will be subject to approval by the relevant antitrust authorities.

[Image: USJ/Shutterstock; Porsche]

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  • Dusterdude @El scotto , I'm aware of the history, I have been in the "working world" for close to 40 years with many of them being in automotive. We have to look at situation in the "big picture". Did UAW make concessions in past ? - yes. Do they deserve an increase now ? -yes . Is their pay increase reasonable given their current compensation package ? Not at all ! By the way - are the automotive CEO's overpaid - definitely! (That is the case in many industries, and a separate topic). As the auto industry slowly but surely moves to EV's , the "big 3" will need to be producing top quality competitive vehicles or they will not survive.
  • Art_Vandelay “We skipped it because we didn’t think anyone would want to steal these things”-Hyundai
  • El scotto Huge lumbering SUV? Check. Unknown name soon to be made popular by Tiktok ilk? Check. Scads of these showing up in school drop-off lines? Check. The only real over/under is if these will have as much cachet as Land Rovers themselves? A bespoken item had to be new at one time. Bonus "accepted by the right kind of people" points if EBFlex or Tassos disapproves.
  • El scotto No, "brothers and sisters" are the core strength of the union. So you'll take less money and less benefits because "my company really needs helped out"? The UAW already did that with two-tier employees and concessions on their last contract.The Big 3 have never, ever locked out the UAW. The Big 3 have agreed to every collective bargaining agreement since WWII. Neither side will change.
  • El scotto Never mind that that F-1 is a bigger circus than EBFlex and Tassos shopping together for their new BDSM outfits and personal lubricants. Also, the F1 rumor mill churns more than EBFlex's mind choosing a new Sharpie to make his next "Free Candy" sign for his white Ram work van. GM will spend a year or two learning how things work in F1. By the third or fourth year GM will have a competitive "F-1 LS" engine. After they win a race or two Ferrari will protest to highest F-1 authorities. Something not mentioned: Will GM get tens of millions of dollars from F-1? Ferrari gets 30 million a year as a participation trophy.