When biofuels (also called biofuels) emerged, they were considered a type of renewable energy,[9]​ but it has subsequently been seen that this is not the case.[10]​

In principle, they are carbon neutral because the carbon dioxide emitted when burning them has previously been removed from the atmosphere when the plant from which the biofuel is extracted grows.[11]​[12]​ However, to strictly calculate the net emissions of a biofuel, we must also take into account those produced when cultivating that plant and processing it until obtaining the final product.[10]​.

Carbon-neutral fuels manufactured by combining hydrogen obtained through electrolysis with carbon dioxide that is subtracted from the medium are also called "4G generation of gasoline"[13]​ (although technically they are not all gasoline). The 1G was biofuels, but they diverted land for food crops and increased prices[13]​ or deprecated the environment (palm oil). 2G used forest remains, but it was not profitable. 3G used algae as a source of organic matter, but it has not managed to take off either,[13]​ although for different uses the cultivation of algae has become profitable.[14]​.

If carbon-neutral fuels were to replace fossil fuels, or were produced from residual carbon dioxide or carbonic acid in seawater, and used with carbon capture in the stack or tailpipe, then they would result in negative carbon dioxide emissions and net removal of carbon dioxide from the atmosphere. They would thus constitute a form of climate change mitigation.[15][16][17][18] But in 2020, the capture and storage of carbon dioxide from a fuel vehicle is still not viable, nor is carbon capture and storage seen as the solution to global warming.[19] It would be viable, however, for example, to manufacture synthetic methane with renewable energy, burn it in a combined cycle plant and capture and store the gases produced. In continuous operation it would be inefficient compared to directly taking advantage of renewable energy. But if renewable energy is used when it is available (wind when the wind blows, for example) to manufacture synthetic fuel and store it, that fuel can then be used when renewable energy is not available (when the wind does not blow, continuing with the example).[20]​.

Such a power-to-fuel and carbon-negative fuel scheme can be realized by electrolysis of water to produce hydrogen. Through the Sabatier reaction, methane can be obtained, which can be stored (it is also possible to store hydrogen directly, but it can be more expensive) to be used later in power plants (in the form of synthetic natural gas, with properties similar to that extracted from deposits), transported by pipeline, tanker truck or methane tanker, or used in processes for converting natural gas into liquid fuels, such as the Fischer-Tropsch process, and thus obtain fuels with properties analogous to those of conventional ones for transportation or heating.[21]​[22]​[23]​.

Another process to obtain synthetic fuels is Pott-Broche (direct liquefaction of coal), but it is not neutral in emissions, but rather increases them.

Like regular biofuels, synthetic fuels are only carbon negative (i.e. they only reduce the amount of greenhouse gases in the atmosphere) as long as they are not used. But of course, they are not going to be manufactured so as not to use them. When burned, the carbon they contain is emitted back into the atmosphere in the form of carbon dioxide, negating the environmental benefit. In this way, the time between the production of the fuel and its combustion (the time that carbon dioxide remains stored, and not in the atmosphere, raising the temperature of the planet) can be quite short (much shorter than the 100 years of storage established by the Kyoto Protocol for afforestation or reforestation projects. Even shorter than that of underground carbon storage.[24]​.

Carbon-neutral fuels are used in Germany and Iceland for distributed storage of renewable energy, minimizing the intermittency problems of solar or wind energy, and allowing the transmission (in the form of natural gas) of those energies through existing gas pipelines.[25] These renewable fuels could alleviate the costs and dependence caused by imported fossil fuels without requiring either the electrification of the vehicle fleet or their adaptation to run on hydrogen or other fuels.[21] To do this, it is necessary to build all the (still expensive) plants[26]​ for manufacturing these synthetic fuels that provide the millions of liters of fossil fuels that are currently consumed. It is not clear whether this will be cheaper than electrifying the vehicle fleet. A 250 kW synthetic methane plant has been built in Germany and is being scaled up to 10 MW.[27] Various technologies for direct carbon dioxide capture and conversion into fuels are advancing rapidly and reducing costs.[28]

Carbon credits could also play an important role for carbon-negative fuels, financing them if they are actually implemented.[29]​.

A portion of carbon-neutral fuels are synthetic hydrocarbons. They can be produced with chemical reactions between carbon dioxide (captured from the chimneys of thermal power plants or directly from the air), and hydrogen, which is produced by electrolysis of water using renewable energy. These fuels, sometimes called electrofuels or electrofuels, store the energy that was used to produce the hydrogen.[30] It is also possible to recover this energy by directly combining hydrogen with oxygen in a fuel cell. Coal can also be used as the source of the carbon that combines with hydrogen, but this process would not be carbon neutral.

Storing renewable energy in zero-emission fuels is just one form of energy storage. There are many others, with various installation costs, operating costs, performance (percentage of the stored energy that they allow to be recovered), danger, capacity (megawatt hours that they can store) or power (speed at which they can absorb the energy that is introduced to them, and speed at which they can release it, not necessarily equal),[31]​ to name just a few parameters, which also change over time due to technological progress. Due to this, the optimal energy storage solution for a company, a region or a country may not be a single technology, but a studied combination of several.

Theoretically carbon dioxide can be captured and buried, making fossil fuels carbon neutral, although non-renewable. If carbon dioxide is captured from synthetic fuel exhaust, the entire process theoretically results in negative emissions. In practice capture consumes a lot of energy and the stability of the stored carbon dioxide is not technologically resolved.[19] It is also possible to fractionate long chain hydrocarbons to produce hydrogen and carbon dioxide, which could then be stored, while the hydrogen would be used for energy or fuel. This method would also be carbon neutral.[32]​.

Hydrogen is the synthetic fuel that can be produced with the greatest energy efficiency and with the minimum number of steps. It can then be used in fuel cell vehicles,[33]​ although it is 3 times less efficient than the propulsion of fully electric vehicles using batteries.[34]​.

There are a few more fuels that can be produced from hydrogen. For example, formic acid (CHO) can be manufactured by reacting hydrogen with CO. The acid combined with more CO can form isobutanol.[35]​.

Methanol can be produced by reacting one molecule of carbon dioxide with 3 hydrogen to produce methanol and water. The stored energy can be recovered by burning the methanol in a combustion engine, releasing carbon dioxide, water and heat. With a similar reaction, methane can be produced. Special precautions must be taken to prevent some methane from escaping into the atmosphere during production or transport to its final destination, because its global warming potential is 21 times greater than that of CO.

More energy can be used to combine methanol or methane into longer chain fuel hydrocarbons,[21][33]​ such as ethanol[36]​.

Researchers have also suggested using methanol to produce dimethyl ether (CHO). This fuel could be used as a substitute for diesel due to its self-ignition capacity at high temperature and pressure. In some areas it is already being used for heating and power generation. It is not toxic, but must be stored under pressure.[37]​.

All synthetic hydrocarbons are generally produced at temperatures of 200–300 °C and pressures of 20 to 50 bar. Catalysts are normally used to improve the efficiency of the various reactions. Such reactions are endothermic in overall balance and use approximately 3 moles of hydrogen per mole of carbon dioxide. They also produce large amounts of water as a byproduct.[5]​.

The cheapest source of carbon dioxide to recycle into carbon-neutral fuels is the combustion gases of a conventional cycle thermoelectric plant, where it can be obtained at about 7.50 US dollars ($) per ton.[7][38] However, this process is not carbon neutral, because this CO is of fossil origin, and therefore CO is transferred from the geosphere to the atmosphere. Capturing automobile exhaust has also been seen, in principle, as cheap, but it would require extensive design changes for new units or major adaptations of those already in service.[39] Another source is carbonic acid dissolved in seawater: as it is in chemical equilibrium with atmospheric carbon dioxide (this means that, if an amount of CO is extracted from seawater, the same amount passes naturally from the atmosphere to the sea; and vice versa: if CO is emitted into the atmosphere, some of it dissolves in the sea in the form of carbonic acid, so the sea is becoming more acidic as CO increases in the atmosphere), the extraction of CO from seawater has been studied. Researchers have estimated that this extraction would cost about $50 per ton.[8]​ Removal of CO from refinery gases is also being used in zero-emission fuel manufacturing projects.[4]​ Capturing carbon dioxide directly from ambient air had higher costs in 2018, between $94 and $232 per ton, and was considered impractical for fuel synthesis or carbon capture and storage.[40]​ This direct extraction has been less developed than other methods. Proposals for this method involve using a caustic chemical to react with carbon dioxide in the air and produce carbonates. These can then be broken down to release pure CO as a gas and regenerate the caustic chemical. This process requires more energy than other methods, because carbon dioxide is found in the atmosphere in much lower concentrations than in other sources.[21]​.

Researchers have also suggested using biomass as a source of carbon dioxide to produce fuels. Adding hydrogen to biomass would reduce (in the chemical sense) its carbon and give fuels as a result. This method has the advantage of using plant raw materials to capture carbon dioxide cheaply. Plants also add some chemical energy to the fuel of biological molecules. This can be a more efficient use of biomass than conventional biofuels, because it uses the entire plant, while traditional biofuels only use part of it (for example, only the sap is used to make ethanol from sugar cane). Its main disadvantage is, like traditional biofuels, that the crops destined for this biomass compete with those destined for food for the scarce available land.[5]​ This disadvantage can be overcome if the biomass that is hydrogenated is from waste from a food crop.

Nighttime wind energy is considered the cheapest electrical energy with which to synthesize fuels, because the load profile of the electrical grid rises sharply in the warmest times of the day (which are the most light, when there is more activity), but the wind tends to blow slightly more at night than during the day. Therefore, the price of nighttime wind energy is often much less expensive than any other. Off-peak wind power prices in high wind penetration areas of the US averaged 1.64 cents per kilowatt hour (kWh) in 2009, but only 0.71 cents/kWh during the cheapest 6 hours of the day.[21]​ Typically, wholesale electricity costs 2 to 5 cents/kWh during the day.[41]​ Some fuel synthesis companies suggest that can produce gasoline at a lower cost than oil if the price of a barrel "Barrel (unit)") exceeds $55.[42]​.

In 2010, a team of chemists led by Heather Willauer of the United States Navy estimated that 100 megawatts (MW) of electricity can produce 160 cubic meters (m³, 41,000 US gallons) of reactor kerosene per day, and that production aboard a ship equipped with a nuclear reactor for propulsion would cost about $1,600/m³ (6 $/gallon). Although this price was approximately double what kerosene from petroleum cost in 2010, it was expected to be lower than what it would cost in 2015 if market trends continued in 2010 (then they did not and the price of oil fell). Furthermore, since supplying fuel to an aircraft carrier and its auxiliary ships costs about $2,100/m³ ($8/gallon), producing kerosene on board is now much less expensive.

Willauer stated that seawater is the "best option" for a source of synthetic kerosene.[43][44] As of April 2014, Willauer's team had not yet managed to make fuel to the standard required for military aircraft, but in September 2013 they were able to power a radio-controlled miniature aircraft powered by a two-stroke internal combustion engine.[45][46][47] As the process requires a lot of electricity, If launched it would be for a US nuclear aircraft carrier (Nimitz class or Gerald R. Ford class).[48] The US Navy hopes to deploy this technology in the 2020-2030 decade.

A 250 kW methane synthesis plant was built at the Center for Solar Energy and Hydrogen Research (ZSW) of the Fraunhofer-Gesellschaft in Baden-Württemberg, Germany, and began operating in 2010. It was expected to scale up to 10 MW in autumn 2012.[49]​[50]​.

Since 2011, the George A. Olah carbon dioxide recycling plant, operated by Carbon Recycling International in Grindavík, Iceland, has produced 2 million liters per year of methanol as vehicle fuel using exhaust gases from the Svartsengi thermal power plant.[51] It has a capacity of 5 million liters per year.

Audi has built a carbon-neutral natural gas liquefaction plant in Werlte, Germany.[52] The plant is intended to produce transportation fuel to offset the liquefied natural gas (LNG) used in its Un3 Sportback g-tron cars. This plant can keep 2,800 tons of CO out of the atmosphere per year at its initial capacity.[53]​.

Columbia (South Carolina),[54]​ Camarillo (California)[55]​ and Darlington (England),[56]​ are home to commercial developments. A demonstration project in Berkeley, California, proposes synthesizing both fuels and dietary fats from exhaust gases.[57]​.

Carbon-neutral fuels can help prevent the greenhouse effect from increasing (the greater the amount of carbon dioxide in the atmosphere) because they can avoid the burning of fossil fuels. For example, if hydrogen is produced when renewable energy is abundant[58]​ and, when it is scarce, it is burned in an electric turbine, it can avoid resorting to a fossil natural gas plant, which increases the amount of CO in the atmosphere. If the CO emitted by thermal power plants were captured, they would not increase the CO in the atmosphere, but when synthetic fuels manufactured with that captured CO were burned in vehicles, the CO in the atmosphere would increase, because there is no economical way to capture vehicle emissions.[21] Capturing power plants is possible, but very expensive, and it is more profitable to replace them with renewable energies.[59] In 2012 it was evaluated that the majority of coal-fired thermal power plants and natural gas can be viably equipped with CO filters (scrubbers) for carbon capture and thus recycle the exhaust gases, or store the CO underground.[16] In 2012, it was expected not only that this recycling would cost less than the economic impacts of global warming caused by the greenhouse effect, but that it would produce fuels cheaper than fossil fuels, due to the growth in global fuel demand and the expected oil peak that was expected to increase oil prices and fungible natural gas.[15]​[17]​ But the sharp decline in renewable energy prices has made this assessment erroneous. In 2019, many countries have already established 2050 as the deadline by which their greenhouse gas emissions balance must be zero.[60]​ To achieve this, all technology that currently generates emissions and for which there is an emissions-free alternative must be replaced. The few remaining emissions will be offset.[61]​.

Capturing CO2 from the air or seawater with renewable energy to synthesize fuels that would then be burned in vehicles would create a closed carbon cycle. On a sufficient scale, this capture would entirely eliminate the need for fossil fuels, assuming enough renewable energy was available. On the other hand, using synthetic hydrocarbons to produce materials such as plastics could result in a permanent reduction of atmospheric CO.[21]​.

Traditional fuels, methanol or ethanol

Some authorities have recommended producing methanol instead of traditional transportation fuels (gasoline and diesel). Methanol is liquid at normal temperatures and toxic if swallowed. It has a higher octane rating than gasoline, but lower energy density, and can be mixed with some fuels (for example, gasoline itself) or used neat. In both cases the engine must be designed to accept that fuel; Feeding methanol to an engine designed for gasoline will ruin it.

Methanol can also be used in the production of more complex hydrocarbons and polymers. Direct methanol fuel cells have been developed by the California Jet Propulsion Laboratory to convert methanol and oxygen into electricity.[37] It is possible to convert methanol into gasoline, kerosene, or other hydrocarbons, but that requires additional energy and more complex production facilities.[21] Methanol is slightly more corrosive than traditional fuels, so using it in an adaptable gasoline automobile requires modifications on the order of 100 $.[5]​.

In 2016, a method was developed that uses nitrogen, carbon spicules and copper nanoparticles to convert carbon dioxide into ethanol, with properties similar to methanol.[62]​.

Microalgae

Microalgae are a potential source of carbon-neutral fuels, but efforts to harness this potential have so far not borne fruit. They are single-celled aquatic organisms that live in a large and diverse group and do not have complex cellular structures, unlike multicellular plants. However, they are still photo-autotrophs, capable of using solar energy to convert some substances into others through photosynthesis. They are typically found in freshwater and saltwater systems, and approximately 50,000 species have been found.[63]​.

It has been predicted (but remains to be seen) that microalgae will be a good substitute for oil for fuel needs in the era of global warming. Microalgae convert CO into biomass at a faster rate[64]​ than terrestrial biofuel crops, and they also do not compete for cropland, but it is more complicated to harvest them.

Therefore, interest in cultivating microalgae has increased in recent years. They are seen as potential raw materials for the production of biofuels due to their ability to produce polysaccharides and triglycerides (sugars and fats), which are precursors to bioethanol and biodiesel.[65] Microalgae can also be used to feed livestock due to their proteins. Furthermore, some species of microalgae produce valuable compounds such as pigments or medicines.[64]​ In 2020, a microalgae producing company, which takes advantage of part of the CO emitted by a combined cycle plant, is doubling its business volume annually, but not producing biofuels, as initially planned (that line of business has not been successful), but rather fertilizers.[14]​.

The two main ways to grow microalgae are flow-through ponds and photobioreactors. These ponds consist of an oval loop channel with a paddle wheel to circulate water and prevent sedimentation. The channel is open to the air and its depth ranges between 0.25 and 0.4 m (0.82–1.31 ft).[65] It is necessary that the channel be shallow because self-shading (algae in the upper layers remove light from those in the lower ones) and absorption of light by water can limit the penetration of sunlight (on which the algae feed) into the growing medium.

A photobioreactor is made up of a set of closed transparent tubes, with a central tank that drives the liquid. It is easier to manage than a continuous flow pond, but its overall production costs are higher.[66]​.

Greenhouse gas (GHG) emissions from microalgae fuel production can be compared to emissions from conventional biofuel production. The emissions from the production of fuels with microalgae in photobioreactors could exceed the emissions from conventional fossil diesel, which means that this form of production would not make sense if what we want is to reduce emissions. The inefficiency is due to the amount of electricity used to pump the growing medium throughout the system. Using crop byproducts or renewable energies to generate electricity are strategies that can improve the total balance of emissions. The environmental impact of algae water and nutrient management must also be taken into account. But, in general, continuous flow ponds give a better emissions balance than photobioreactors.[14]​.

The costs of producing biofuels by growing microalgae in continuous flow ponds are dominated by operating costs, which include labor, raw materials, water and electricity. In these ponds, during the cultivation process, electricity accounts for the majority (22 to 79%) of the total energy needs.[65]​ It is used to keep the microalgae culture circulating. On the other hand, if photobioreactors are used, the capital cost dominates. Using photobioreactors involves high construction costs, but lower operating costs than ponds.[14]​.

The production of biofuels with microalgae cost much more money in 2011 (around $3.1/liter or $11.57/gallon),[67]​ than producing fuels with oil ($0.48/liter or $1.820/gallon in October 2018[68]​ according to data provided by the California Energy Commission. This price ratio leads many to choose fuels fossils for economic reasons, even if this causes an increase in emissions of carbon dioxide and other greenhouse gases.

Several environmental impacts are known from the cultivation of microalgae:

In the area where the cultivation is carried out, there may be a greater demand for fresh water, because microalgae are aquatic organisms. Fresh water is used to compensate for evaporation in continuous flow ponds. It is also used for refrigeration. Recirculating water could reduce the need for this liquid, but it poses a greater risk of infection of microalgae or inhibition of its growth by bacteria, fungi or viruses. These inhibitors are found in higher concentrations in recycled water, along with non-pathogenic inhibitors such as organic and inorganic chemicals or metabolites resulting from the natural death of some of the microalgae that are cultivated.

Many species of microalgae can produce toxins (from ammonia to physiologically active polysaccharides and polypeptides) at some point in their life cycle. These toxins can be important and valuable products for their applications in biomedicine, toxicology and chemical research. However, they can also produce negative effects. These toxins can be acute (released in a significant amount at a given time) or chronic (released in small concentrations throughout the life of the algae). An example of an acute toxin is paralytic shellfish poisoning,[69]​ which can cause death to the person who ingests the contaminated shellfish. An example of a chronic toxin is the slow ulcerative and carcinogenic changes in tissues caused by the toxic carrageenans that produce red tides. Given the high variability of toxins produced by microalgae, in a pond where they are cultured it is not always possible to predict the presence or absence of toxins. It all depends on the environment and the conditions of the ecosystem.[66]​.

Water and carbon dioxide diesel

Audi has co-developed E-diesel, a carbon-neutral fuel with a high cetane number. It is also working on E-gasoline, manufactured through a similar process.[70]​.

Water is electrolyzed at high temperature to produce hydrogen and oxygen gases. The necessary energy is extracted from renewable sources, such as wind. The hydrogen is then reacted with compressed carbon dioxide captured directly from the air. The reaction produces the so-called "blue crude oil" (it is actually a transparent liquid; it is called that to contrast its difference with petroleum, which is black or very dark brown), composed of hydrocarbons. The blue crude oil is then refined to produce highly efficient E-diesel.[71]​[72]​ However, this method is still debatable, because with current production capacity only 3,000 liters can be manufactured in a few months, 0.0002% of daily fuel production in the US.[73]​ Furthermore, the thermodynamic and economic viability of this technology has been questioned. One article suggests that this technology does not create an alternative to fossil fuels, but simply converts renewable energy into liquid fuel. The article also states that to obtain a liter of E-diesel, 18 times more energy is needed than to obtain a liter of conventional fossil diesel.[74]​.

Research into carbon-neutral fuels has been underway for decades. A 1965 report suggested synthesizing methanol from carbon dioxide in the air and nuclear energy to create a mobile fueling facility.[75] Production of synthetic fuel aboard nuclear-powered ships was studied in 1977 and 1995.[76][77] A 1984 report studied the capture of carbon dioxide from thermal power plants and its conversion into fuel.[78] A report of 1995 compared the conversion of vehicle fleets so that they could use carbon-neutral methanol with the more complicated synthesis of gasoline, but which would not require any adaptation of the vehicles.[79]​.

When biofuels (also called biofuels) emerged, they were considered a type of renewable energy,[9]​ but it has subsequently been seen that this is not the case.[10]​

In principle, they are carbon neutral because the carbon dioxide emitted when burning them has previously been removed from the atmosphere when the plant from which the biofuel is extracted grows.[11]​[12]​ However, to strictly calculate the net emissions of a biofuel, we must also take into account those produced when cultivating that plant and processing it until obtaining the final product.[10]​.

Carbon-neutral fuels manufactured by combining hydrogen obtained through electrolysis with carbon dioxide that is subtracted from the medium are also called "4G generation of gasoline"[13]​ (although technically they are not all gasoline). The 1G was biofuels, but they diverted land for food crops and increased prices[13]​ or deprecated the environment (palm oil). 2G used forest remains, but it was not profitable. 3G used algae as a source of organic matter, but it has not managed to take off either,[13]​ although for different uses the cultivation of algae has become profitable.[14]​.

If carbon-neutral fuels were to replace fossil fuels, or were produced from residual carbon dioxide or carbonic acid in seawater, and used with carbon capture in the stack or tailpipe, then they would result in negative carbon dioxide emissions and net removal of carbon dioxide from the atmosphere. They would thus constitute a form of climate change mitigation.[15][16][17][18] But in 2020, the capture and storage of carbon dioxide from a fuel vehicle is still not viable, nor is carbon capture and storage seen as the solution to global warming.[19] It would be viable, however, for example, to manufacture synthetic methane with renewable energy, burn it in a combined cycle plant and capture and store the gases produced. In continuous operation it would be inefficient compared to directly taking advantage of renewable energy. But if renewable energy is used when it is available (wind when the wind blows, for example) to manufacture synthetic fuel and store it, that fuel can then be used when renewable energy is not available (when the wind does not blow, continuing with the example).[20]​.

Such a power-to-fuel and carbon-negative fuel scheme can be realized by electrolysis of water to produce hydrogen. Through the Sabatier reaction, methane can be obtained, which can be stored (it is also possible to store hydrogen directly, but it can be more expensive) to be used later in power plants (in the form of synthetic natural gas, with properties similar to that extracted from deposits), transported by pipeline, tanker truck or methane tanker, or used in processes for converting natural gas into liquid fuels, such as the Fischer-Tropsch process, and thus obtain fuels with properties analogous to those of conventional ones for transportation or heating.[21]​[22]​[23]​.

Another process to obtain synthetic fuels is Pott-Broche (direct liquefaction of coal), but it is not neutral in emissions, but rather increases them.

Like regular biofuels, synthetic fuels are only carbon negative (i.e. they only reduce the amount of greenhouse gases in the atmosphere) as long as they are not used. But of course, they are not going to be manufactured so as not to use them. When burned, the carbon they contain is emitted back into the atmosphere in the form of carbon dioxide, negating the environmental benefit. In this way, the time between the production of the fuel and its combustion (the time that carbon dioxide remains stored, and not in the atmosphere, raising the temperature of the planet) can be quite short (much shorter than the 100 years of storage established by the Kyoto Protocol for afforestation or reforestation projects. Even shorter than that of underground carbon storage.[24]​.

Carbon-neutral fuels are used in Germany and Iceland for distributed storage of renewable energy, minimizing the intermittency problems of solar or wind energy, and allowing the transmission (in the form of natural gas) of those energies through existing gas pipelines.[25] These renewable fuels could alleviate the costs and dependence caused by imported fossil fuels without requiring either the electrification of the vehicle fleet or their adaptation to run on hydrogen or other fuels.[21] To do this, it is necessary to build all the (still expensive) plants[26]​ for manufacturing these synthetic fuels that provide the millions of liters of fossil fuels that are currently consumed. It is not clear whether this will be cheaper than electrifying the vehicle fleet. A 250 kW synthetic methane plant has been built in Germany and is being scaled up to 10 MW.[27] Various technologies for direct carbon dioxide capture and conversion into fuels are advancing rapidly and reducing costs.[28]

Carbon credits could also play an important role for carbon-negative fuels, financing them if they are actually implemented.[29]​.

A portion of carbon-neutral fuels are synthetic hydrocarbons. They can be produced with chemical reactions between carbon dioxide (captured from the chimneys of thermal power plants or directly from the air), and hydrogen, which is produced by electrolysis of water using renewable energy. These fuels, sometimes called electrofuels or electrofuels, store the energy that was used to produce the hydrogen.[30] It is also possible to recover this energy by directly combining hydrogen with oxygen in a fuel cell. Coal can also be used as the source of the carbon that combines with hydrogen, but this process would not be carbon neutral.

Storing renewable energy in zero-emission fuels is just one form of energy storage. There are many others, with various installation costs, operating costs, performance (percentage of the stored energy that they allow to be recovered), danger, capacity (megawatt hours that they can store) or power (speed at which they can absorb the energy that is introduced to them, and speed at which they can release it, not necessarily equal),[31]​ to name just a few parameters, which also change over time due to technological progress. Due to this, the optimal energy storage solution for a company, a region or a country may not be a single technology, but a studied combination of several.

Theoretically carbon dioxide can be captured and buried, making fossil fuels carbon neutral, although non-renewable. If carbon dioxide is captured from synthetic fuel exhaust, the entire process theoretically results in negative emissions. In practice capture consumes a lot of energy and the stability of the stored carbon dioxide is not technologically resolved.[19] It is also possible to fractionate long chain hydrocarbons to produce hydrogen and carbon dioxide, which could then be stored, while the hydrogen would be used for energy or fuel. This method would also be carbon neutral.[32]​.

Hydrogen is the synthetic fuel that can be produced with the greatest energy efficiency and with the minimum number of steps. It can then be used in fuel cell vehicles,[33]​ although it is 3 times less efficient than the propulsion of fully electric vehicles using batteries.[34]​.

There are a few more fuels that can be produced from hydrogen. For example, formic acid (CHO) can be manufactured by reacting hydrogen with CO. The acid combined with more CO can form isobutanol.[35]​.

Methanol can be produced by reacting one molecule of carbon dioxide with 3 hydrogen to produce methanol and water. The stored energy can be recovered by burning the methanol in a combustion engine, releasing carbon dioxide, water and heat. With a similar reaction, methane can be produced. Special precautions must be taken to prevent some methane from escaping into the atmosphere during production or transport to its final destination, because its global warming potential is 21 times greater than that of CO.

More energy can be used to combine methanol or methane into longer chain fuel hydrocarbons,[21][33]​ such as ethanol[36]​.

Researchers have also suggested using methanol to produce dimethyl ether (CHO). This fuel could be used as a substitute for diesel due to its self-ignition capacity at high temperature and pressure. In some areas it is already being used for heating and power generation. It is not toxic, but must be stored under pressure.[37]​.

All synthetic hydrocarbons are generally produced at temperatures of 200–300 °C and pressures of 20 to 50 bar. Catalysts are normally used to improve the efficiency of the various reactions. Such reactions are endothermic in overall balance and use approximately 3 moles of hydrogen per mole of carbon dioxide. They also produce large amounts of water as a byproduct.[5]​.

The cheapest source of carbon dioxide to recycle into carbon-neutral fuels is the combustion gases of a conventional cycle thermoelectric plant, where it can be obtained at about 7.50 US dollars ($) per ton.[7][38] However, this process is not carbon neutral, because this CO is of fossil origin, and therefore CO is transferred from the geosphere to the atmosphere. Capturing automobile exhaust has also been seen, in principle, as cheap, but it would require extensive design changes for new units or major adaptations of those already in service.[39] Another source is carbonic acid dissolved in seawater: as it is in chemical equilibrium with atmospheric carbon dioxide (this means that, if an amount of CO is extracted from seawater, the same amount passes naturally from the atmosphere to the sea; and vice versa: if CO is emitted into the atmosphere, some of it dissolves in the sea in the form of carbonic acid, so the sea is becoming more acidic as CO increases in the atmosphere), the extraction of CO from seawater has been studied. Researchers have estimated that this extraction would cost about $50 per ton.[8]​ Removal of CO from refinery gases is also being used in zero-emission fuel manufacturing projects.[4]​ Capturing carbon dioxide directly from ambient air had higher costs in 2018, between $94 and $232 per ton, and was considered impractical for fuel synthesis or carbon capture and storage.[40]​ This direct extraction has been less developed than other methods. Proposals for this method involve using a caustic chemical to react with carbon dioxide in the air and produce carbonates. These can then be broken down to release pure CO as a gas and regenerate the caustic chemical. This process requires more energy than other methods, because carbon dioxide is found in the atmosphere in much lower concentrations than in other sources.[21]​.

Researchers have also suggested using biomass as a source of carbon dioxide to produce fuels. Adding hydrogen to biomass would reduce (in the chemical sense) its carbon and give fuels as a result. This method has the advantage of using plant raw materials to capture carbon dioxide cheaply. Plants also add some chemical energy to the fuel of biological molecules. This can be a more efficient use of biomass than conventional biofuels, because it uses the entire plant, while traditional biofuels only use part of it (for example, only the sap is used to make ethanol from sugar cane). Its main disadvantage is, like traditional biofuels, that the crops destined for this biomass compete with those destined for food for the scarce available land.[5]​ This disadvantage can be overcome if the biomass that is hydrogenated is from waste from a food crop.

Nighttime wind energy is considered the cheapest electrical energy with which to synthesize fuels, because the load profile of the electrical grid rises sharply in the warmest times of the day (which are the most light, when there is more activity), but the wind tends to blow slightly more at night than during the day. Therefore, the price of nighttime wind energy is often much less expensive than any other. Off-peak wind power prices in high wind penetration areas of the US averaged 1.64 cents per kilowatt hour (kWh) in 2009, but only 0.71 cents/kWh during the cheapest 6 hours of the day.[21]​ Typically, wholesale electricity costs 2 to 5 cents/kWh during the day.[41]​ Some fuel synthesis companies suggest that can produce gasoline at a lower cost than oil if the price of a barrel "Barrel (unit)") exceeds $55.[42]​.

In 2010, a team of chemists led by Heather Willauer of the United States Navy estimated that 100 megawatts (MW) of electricity can produce 160 cubic meters (m³, 41,000 US gallons) of reactor kerosene per day, and that production aboard a ship equipped with a nuclear reactor for propulsion would cost about $1,600/m³ (6 $/gallon). Although this price was approximately double what kerosene from petroleum cost in 2010, it was expected to be lower than what it would cost in 2015 if market trends continued in 2010 (then they did not and the price of oil fell). Furthermore, since supplying fuel to an aircraft carrier and its auxiliary ships costs about $2,100/m³ ($8/gallon), producing kerosene on board is now much less expensive.

Willauer stated that seawater is the "best option" for a source of synthetic kerosene.[43][44] As of April 2014, Willauer's team had not yet managed to make fuel to the standard required for military aircraft, but in September 2013 they were able to power a radio-controlled miniature aircraft powered by a two-stroke internal combustion engine.[45][46][47] As the process requires a lot of electricity, If launched it would be for a US nuclear aircraft carrier (Nimitz class or Gerald R. Ford class).[48] The US Navy hopes to deploy this technology in the 2020-2030 decade.

A 250 kW methane synthesis plant was built at the Center for Solar Energy and Hydrogen Research (ZSW) of the Fraunhofer-Gesellschaft in Baden-Württemberg, Germany, and began operating in 2010. It was expected to scale up to 10 MW in autumn 2012.[49]​[50]​.

Since 2011, the George A. Olah carbon dioxide recycling plant, operated by Carbon Recycling International in Grindavík, Iceland, has produced 2 million liters per year of methanol as vehicle fuel using exhaust gases from the Svartsengi thermal power plant.[51] It has a capacity of 5 million liters per year.

Audi has built a carbon-neutral natural gas liquefaction plant in Werlte, Germany.[52] The plant is intended to produce transportation fuel to offset the liquefied natural gas (LNG) used in its Un3 Sportback g-tron cars. This plant can keep 2,800 tons of CO out of the atmosphere per year at its initial capacity.[53]​.

Columbia (South Carolina),[54]​ Camarillo (California)[55]​ and Darlington (England),[56]​ are home to commercial developments. A demonstration project in Berkeley, California, proposes synthesizing both fuels and dietary fats from exhaust gases.[57]​.

Carbon-neutral fuels can help prevent the greenhouse effect from increasing (the greater the amount of carbon dioxide in the atmosphere) because they can avoid the burning of fossil fuels. For example, if hydrogen is produced when renewable energy is abundant[58]​ and, when it is scarce, it is burned in an electric turbine, it can avoid resorting to a fossil natural gas plant, which increases the amount of CO in the atmosphere. If the CO emitted by thermal power plants were captured, they would not increase the CO in the atmosphere, but when synthetic fuels manufactured with that captured CO were burned in vehicles, the CO in the atmosphere would increase, because there is no economical way to capture vehicle emissions.[21] Capturing power plants is possible, but very expensive, and it is more profitable to replace them with renewable energies.[59] In 2012 it was evaluated that the majority of coal-fired thermal power plants and natural gas can be viably equipped with CO filters (scrubbers) for carbon capture and thus recycle the exhaust gases, or store the CO underground.[16] In 2012, it was expected not only that this recycling would cost less than the economic impacts of global warming caused by the greenhouse effect, but that it would produce fuels cheaper than fossil fuels, due to the growth in global fuel demand and the expected oil peak that was expected to increase oil prices and fungible natural gas.[15]​[17]​ But the sharp decline in renewable energy prices has made this assessment erroneous. In 2019, many countries have already established 2050 as the deadline by which their greenhouse gas emissions balance must be zero.[60]​ To achieve this, all technology that currently generates emissions and for which there is an emissions-free alternative must be replaced. The few remaining emissions will be offset.[61]​.

Capturing CO2 from the air or seawater with renewable energy to synthesize fuels that would then be burned in vehicles would create a closed carbon cycle. On a sufficient scale, this capture would entirely eliminate the need for fossil fuels, assuming enough renewable energy was available. On the other hand, using synthetic hydrocarbons to produce materials such as plastics could result in a permanent reduction of atmospheric CO.[21]​.

Traditional fuels, methanol or ethanol

Some authorities have recommended producing methanol instead of traditional transportation fuels (gasoline and diesel). Methanol is liquid at normal temperatures and toxic if swallowed. It has a higher octane rating than gasoline, but lower energy density, and can be mixed with some fuels (for example, gasoline itself) or used neat. In both cases the engine must be designed to accept that fuel; Feeding methanol to an engine designed for gasoline will ruin it.

Methanol can also be used in the production of more complex hydrocarbons and polymers. Direct methanol fuel cells have been developed by the California Jet Propulsion Laboratory to convert methanol and oxygen into electricity.[37] It is possible to convert methanol into gasoline, kerosene, or other hydrocarbons, but that requires additional energy and more complex production facilities.[21] Methanol is slightly more corrosive than traditional fuels, so using it in an adaptable gasoline automobile requires modifications on the order of 100 $.[5]​.

In 2016, a method was developed that uses nitrogen, carbon spicules and copper nanoparticles to convert carbon dioxide into ethanol, with properties similar to methanol.[62]​.

Microalgae

Microalgae are a potential source of carbon-neutral fuels, but efforts to harness this potential have so far not borne fruit. They are single-celled aquatic organisms that live in a large and diverse group and do not have complex cellular structures, unlike multicellular plants. However, they are still photo-autotrophs, capable of using solar energy to convert some substances into others through photosynthesis. They are typically found in freshwater and saltwater systems, and approximately 50,000 species have been found.[63]​.

It has been predicted (but remains to be seen) that microalgae will be a good substitute for oil for fuel needs in the era of global warming. Microalgae convert CO into biomass at a faster rate[64]​ than terrestrial biofuel crops, and they also do not compete for cropland, but it is more complicated to harvest them.

Therefore, interest in cultivating microalgae has increased in recent years. They are seen as potential raw materials for the production of biofuels due to their ability to produce polysaccharides and triglycerides (sugars and fats), which are precursors to bioethanol and biodiesel.[65] Microalgae can also be used to feed livestock due to their proteins. Furthermore, some species of microalgae produce valuable compounds such as pigments or medicines.[64]​ In 2020, a microalgae producing company, which takes advantage of part of the CO emitted by a combined cycle plant, is doubling its business volume annually, but not producing biofuels, as initially planned (that line of business has not been successful), but rather fertilizers.[14]​.

The two main ways to grow microalgae are flow-through ponds and photobioreactors. These ponds consist of an oval loop channel with a paddle wheel to circulate water and prevent sedimentation. The channel is open to the air and its depth ranges between 0.25 and 0.4 m (0.82–1.31 ft).[65] It is necessary that the channel be shallow because self-shading (algae in the upper layers remove light from those in the lower ones) and absorption of light by water can limit the penetration of sunlight (on which the algae feed) into the growing medium.

A photobioreactor is made up of a set of closed transparent tubes, with a central tank that drives the liquid. It is easier to manage than a continuous flow pond, but its overall production costs are higher.[66]​.

Greenhouse gas (GHG) emissions from microalgae fuel production can be compared to emissions from conventional biofuel production. The emissions from the production of fuels with microalgae in photobioreactors could exceed the emissions from conventional fossil diesel, which means that this form of production would not make sense if what we want is to reduce emissions. The inefficiency is due to the amount of electricity used to pump the growing medium throughout the system. Using crop byproducts or renewable energies to generate electricity are strategies that can improve the total balance of emissions. The environmental impact of algae water and nutrient management must also be taken into account. But, in general, continuous flow ponds give a better emissions balance than photobioreactors.[14]​.

The costs of producing biofuels by growing microalgae in continuous flow ponds are dominated by operating costs, which include labor, raw materials, water and electricity. In these ponds, during the cultivation process, electricity accounts for the majority (22 to 79%) of the total energy needs.[65]​ It is used to keep the microalgae culture circulating. On the other hand, if photobioreactors are used, the capital cost dominates. Using photobioreactors involves high construction costs, but lower operating costs than ponds.[14]​.

The production of biofuels with microalgae cost much more money in 2011 (around $3.1/liter or $11.57/gallon),[67]​ than producing fuels with oil ($0.48/liter or $1.820/gallon in October 2018[68]​ according to data provided by the California Energy Commission. This price ratio leads many to choose fuels fossils for economic reasons, even if this causes an increase in emissions of carbon dioxide and other greenhouse gases.

Several environmental impacts are known from the cultivation of microalgae:

In the area where the cultivation is carried out, there may be a greater demand for fresh water, because microalgae are aquatic organisms. Fresh water is used to compensate for evaporation in continuous flow ponds. It is also used for refrigeration. Recirculating water could reduce the need for this liquid, but it poses a greater risk of infection of microalgae or inhibition of its growth by bacteria, fungi or viruses. These inhibitors are found in higher concentrations in recycled water, along with non-pathogenic inhibitors such as organic and inorganic chemicals or metabolites resulting from the natural death of some of the microalgae that are cultivated.

Many species of microalgae can produce toxins (from ammonia to physiologically active polysaccharides and polypeptides) at some point in their life cycle. These toxins can be important and valuable products for their applications in biomedicine, toxicology and chemical research. However, they can also produce negative effects. These toxins can be acute (released in a significant amount at a given time) or chronic (released in small concentrations throughout the life of the algae). An example of an acute toxin is paralytic shellfish poisoning,[69]​ which can cause death to the person who ingests the contaminated shellfish. An example of a chronic toxin is the slow ulcerative and carcinogenic changes in tissues caused by the toxic carrageenans that produce red tides. Given the high variability of toxins produced by microalgae, in a pond where they are cultured it is not always possible to predict the presence or absence of toxins. It all depends on the environment and the conditions of the ecosystem.[66]​.

Water and carbon dioxide diesel

Audi has co-developed E-diesel, a carbon-neutral fuel with a high cetane number. It is also working on E-gasoline, manufactured through a similar process.[70]​.

Water is electrolyzed at high temperature to produce hydrogen and oxygen gases. The necessary energy is extracted from renewable sources, such as wind. The hydrogen is then reacted with compressed carbon dioxide captured directly from the air. The reaction produces the so-called "blue crude oil" (it is actually a transparent liquid; it is called that to contrast its difference with petroleum, which is black or very dark brown), composed of hydrocarbons. The blue crude oil is then refined to produce highly efficient E-diesel.[71]​[72]​ However, this method is still debatable, because with current production capacity only 3,000 liters can be manufactured in a few months, 0.0002% of daily fuel production in the US.[73]​ Furthermore, the thermodynamic and economic viability of this technology has been questioned. One article suggests that this technology does not create an alternative to fossil fuels, but simply converts renewable energy into liquid fuel. The article also states that to obtain a liter of E-diesel, 18 times more energy is needed than to obtain a liter of conventional fossil diesel.[74]​.

Research into carbon-neutral fuels has been underway for decades. A 1965 report suggested synthesizing methanol from carbon dioxide in the air and nuclear energy to create a mobile fueling facility.[75] Production of synthetic fuel aboard nuclear-powered ships was studied in 1977 and 1995.[76][77] A 1984 report studied the capture of carbon dioxide from thermal power plants and its conversion into fuel.[78] A report of 1995 compared the conversion of vehicle fleets so that they could use carbon-neutral methanol with the more complicated synthesis of gasoline, but which would not require any adaptation of the vehicles.[79]​.