The decarbonization of aviation and maritime transport in the European Union (EU) will depend to a great extent on the availability of alternative fuels. Renewable hydrogen and e-fuels are critical alternative fuels to achieve deep decarbonization.
Major EU transport policies, including the Renewable Energy Directive (RED) III and ReFuelEU Aviation, set transport-wide or sector specific targets for renewable synthetic fuels. However, the climate benefit of these fuels will only materialize if they are produced using 100% renewable electricity and do not lead to indirect emissions.
This study assesses the economic costs and climate impacts of importing renewable hydrogen and e-fuels into the European Union. We focus on Brazil and Egypt, where the European Union has recently expanded engagement to facilitate renewable hydrogen and e-fuels imports.
Our findings show that:
- Importing renewable hydrogen as ammonia may be more expensive than producing it within Europe. Renewable-abundant countries such as Brazil or Egypt may produce renewable hydrogen at a lower cost than the European Union. Still, the costs of shipping—including converting hydrogen to ammonia, transporting it over a long distance, and then “cracking,” or reconverting the ammonia back into hydrogen—can be as high as the production cost itself. For example, even in a scenario that assumes mid-level technology costs and current Brazilian government incentives, the cost of importing renewable hydrogen from Brazil in 2030 is nearly 50% higher than the ICCT’s projected EU average when assuming pessimistic technology costs.
