Circular economy

Betting on Blue Crude

Franz Hubik Dresden | Updated on January 08, 2018 Published on October 27, 2017

At Sunfire, German engineers have created a climate-neutral fuel to replace crude oil. Thenext challenge: Making it economically viable.

Nils Aldag likes to use colored markers to give his arguments greater weight. On one recent afternoon, the young entrepreneur stepped up to a whiteboard and drew a chart with black, red and green bars. Each stood for a different energy source. He wrote “Oil” in big letters underneath the largest bar, “Gas” beneath the second-largest and “Electricity” below the smallest. “The world we live in goes around thanks to fossil fuels,” explained Aldag. “Our entire infrastructure is geared toward oil and gas.”

In Germany today, more than a third of all electricity is generated by solar, wind and water energy. But renewables account for less than 14 percent of the energy used in the heat, chemical and transportation industries. “Not all products made using these fuels can be made using green energy,” explained the 31-year- old Aldag. “Everyday items from sports shoes to cosmetics would be unthinkable without crude.” The result is that oil and gas still account for more than 60 percent of energy use.

Aldag has a solution: Blue Crude, a climate-neutral oil replacement. Thousands of products that typically depend on oil can be manufactured using this synthetic “miracle fluid.” It may sound like some sort of futuristic alchemy, but it is already a reality at the Sunfire plant in south Dresden. Founded in 2010 by Aldag and his colleagues, Carl Berninghausen and Christian von Olshausen, the company has some 100 employees and is a specialist in reversible electrolysis and fuel cell technology.

Sunfire has to date produced three tons of Blue Crude using its patented process, which harnesses green energy to efficiently make hydrocarbon molecules. This is how it works: Wind or solar energy is used to power electrolyzers, which use high pressure to split steam into hydrogen and oxygen. Carbon dioxide is then added to the green hydrogen and reduced to carbon monoxide. The process culminates in the formation of Blue Crude, which can be processed in refineries to create waxes, lubricants or fuel for cars and planes.

Synthetic fuels differ from their natural counterparts in that they are “crystal-clear instead of jet-black,” explained Aldag. They do not contain sulphur or other impurities; when burned, they produce nitrogen oxide, but according to Aldag, it is “easily filtered out.” The oil substitute’s major advantage is its ability to be integrated perfectly into existing infrastructure —from refineries to gas stations to combustion engines.

The Blue Crude concept has been well received by industry. The Bavarian car firm Audi and the world’s largest aircraft manufacturer, Boeing, are both project partners. Prominent investors include the French oil company Total, the Czech energy company ČEZ and the investment fund Electranova Capital; insurance giant Allianz and automobile maker PSA are also sponsors.

There is, however, a fundamental problem with Sunfire’s business model: Oil and gas are so cheap that producing Blue Crude doesn’t currently make financial sense. “When it comes to fossil fuels, nature has done all the work during thousands of years. Imitating this process artificially is expensive,” said Michael Starner, professor for Energy Sources and Energy Networks at Regensburg Technical University. “Oil and gas will remain more affordable than Blue Crude until the price of carbon dioxide climbs to well over €100 per ton.” At present, European industries are required to pay less than €7 for each ton of carbon dioxide they emit.

Aldag has asked the government to do something about this. If the entire economy is to be decarbonized, synthetic fuels will be needed in the chemicals industry and for heavy-duty transport, sectors where green energy and batteries often come up against physical limits.

There are other cost issues as well. Much like the case of photovoltaics 20 years ago, electrolyzers will have to come down in price drastically to make Blue Crude competitive. And currently, none of Sunfire’s production is automated; everything is manufactured by hand. “With mass production, we would be able to achieve enormous economies of scale,” said Aldag. Sunfire, together with partners in Norway, has plans to move in that direction: By 2020, they intend to be producing 8,000 tons of Blue Crude annually in a large-volume facility.

Sunfire currently generates turnover of as much as €10 million per year through its demonstration projects. In the long term, Aldag hopes to take in billions. His goal? “I would like Sunfire to be tomorrow’s Linde or Air Liquide,” he said. “But dependent on renewable energies.”

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Published on October 27, 2017
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