Turning CO2 into Sustainable Liquid Fuel

Context of Transport Climate Action

Fossil fuels in transportation contribute a quarter of the man-made greenhouse gases causing climate change. To reduce the dependence on fossil fuels, alternative liquid fuels with low carbon intensity are required but the sustainable and scalable production of these low-carbon intensity fuels with a minimum of indirect impacts on the environment requires non-biological sources of renewable energy. Sustainable non-biological renewable energy energy sources such as the sun and wind depend on weather patterns, time of day and seasons. Electricity generated by these sources is unpredictable and cannot be easily stored. By combining carbon capture with utilization in fuel production and energy storage, Carbon Recycling International (CRI) has developed technology to convert surplus electricity into sustainable liquid fuels which can potentially match the scale and reach of fossil fuels.


CRI’s technology uses well-established technology to convert water into hydrogen with electricity. The CRI hydrogen electrolysis cells are the among the largest in the world. The hydrogen is combined with carbon dioxide, to form methanol. Methanol is a liquid fuel that can be added to all EU gasoline as all gasoline-powered cars can run on gasoline blended with methanol. With only minor modifications, gasoline engine cars can also run on high blends of methanol, where the renewable fuel replaces most or all of the gasoline. Methanol can also be converted into diesel-like fuel or gasoline by proven technology. Traditional applications for methanol are in the chemical industry, including the production of common plastics, replacing oil as raw material. Renewable methanol is therefore a substitute for petrochemicals and their derivatives.


The process developed by Carbon Recycling International (CRI) has been in commercial operation since 2012, from the commissioning of CRI’s CO2-to-fuel plant in Iceland named after George Olah, a Nobel prize laureate (in chemistry 1994) who co-wrote the book “Beyond Oil and Gas: The Methanol Economy” in which he says that fossil fuels can be replaced by methanol, where methanol is a better option than Hydrogen, partly due to its liquid state at ambient temperatures.

All electric energy on the Icelandic national grid is from renewable sources, geothermal and hydropower. Sales of methanol are to domestic fuel producers and blenders, as well as to Sweden and the Netherlands for biodiesel production and gasoline blending.

A new CO2-to-fuel plant is being built in Lünen, outside Dortmund in Nord-Rhein Westfalen, Germany. This plant will be used to demonstrate the ability of the process to convert and store surplus energy from wind and solar in response to fluctuations in supply and demand.


Generation of electricity from renewable energy sources is the most scalable form of sustainable energy generation. Energy sources such as wind, sunlight, hydro and geothermal are often not accessible in the desired location or at the desired point in time. In transportation the use of electricity is limited by the capacity of batteries. Hydrogen can be produced from electricity but requires a specialized distribution system, based on high pressure and refrigeration. The disadvantage of these two energy carriers, batteries and hydrogen gas is therefore the low energy density by weight or volume and large infrastructure costs. Hydrogen can however be converted into methanol, in synthesis with carbon dioxide (CO2).

Methanol is a liquid fuel, with high octane and high heat of combustion, which contributes to efficiency in a sparkplug ignition engine. Methanol can also be converted into diesel substitutes (DME and OMEx). Methanol and its derivatives share the property that they do not cause any sulfur, ozone or particulate (soot) emissions. Based on renewable energy sources, methanol from hydrogen and CO2 can reduce the carbon footprint of automotive fuel by 90%-100% compared to gasoline or diesel. As only CO2 and electricity are used in the process, there is no impact on food production or the use of agricultural resources. The carbon dioxide used would otherwise be emitted into the atmosphere by power plants or industrial producers, but in this process it can be used as raw material.

Potential for scaling up

Scaling up of the process is based on standard chemical engineering principles. Space requirements are modest, as no land is needed for biomass production. Wind mills and solar panels can be located in areas with low economic value, e.g. off-shore or in deserts. Point sources (manufacturing plants or power plants) will provide sufficient CO2 for the production of thousands of billions of liters of methanol, but in the long run CO2 could also be extracted directly from air.

For scaling up, governments must support lower carbon intensity fuels with policies and legislation. Currently excise taxes for transport fuels are per liter, which disadvantages renewable fuels, which contain oxygen and therefore lower energy by volume than fossil fuels. Excise taxes based on CO2 emissions per unit energy would level the playing field.

In addition, the price for emitting carbon should be set high enough in order for new technology to be economical, or the use of fossil fuel must be restricted to the quantity consistent with the limits of temperature increase due to climate change. Fuel specifications must also adapt to allow for higher alcohol content, which requires automakers to update fuel systems and engine control systems. Regulation and taxation should therefore address the fuel value chain and full life-cycle from well to tank and from tank to wheel.

Scaling up can be financed by the private sector if and when credible and long-term predictable policies are in place, e.g. where fossil fuels are phased out progressively by limiting or taxing CO2 emissions and/or limiting the use of fossil fuel.

Selected references










Europe, Mitigation, Passenger, Freight, technology


Carbon Recycling International


Benedikt Stefánsson, bs@cri.is, Kees Hettinga, kees@cri.is

"We are constantly improving the environmental benefits of our biodiesel products. We have had excellent results with CRI's Vulcanol™ product in the development of our Verdis Polaris™ Aura biodiesel, which is specially designed for Nordic climates, and are very pleased to be able to take advantage of the increased production volumes of CRI's expanded renewable methanol plant." said Lars Lind, Managing Director of Biofuels for Perstorp.