Providing the transport sector in Europe with fossil free energy - a model-based analysis under consideration of the MENA region

For reaching the European greenhouse gas emission targets, the phase-in of alternative technologies and energy carriers is crucial for all sectors. For the transport sector, synthetic fuels are–next to electromobility–a promising option, especially for long-distance shipping and air transport. Within this context, the import of synthetic fuels from the Middle East and Northern Africa (MENA) region seems attractive due to low costs for renewable electricity in this region and low transport costs of synthetic fuels at the same time. Against this background, this paper analyzes the role of the MENA region in meeting the future synthetic fuel demand in Europe using a cost-optimizing energy supply model. In this model, the production, storage and transport of electricity, hydrogen and synthetic fuels by various technologies in both European and MENA countries in the period up to 2050 are explicitly modeled. Thereby, different scenarios are analyzed to depict regional differences in investment risks: a base scenario that does not take into account regional differences in investments risks and three risk scenarios with different developments of regional investment risks. Sensitivity analyses are also carried out to derive conclusions about the robustness of results. Results show that meeting the future synthetic fuel demand in Europe to a large extent by imports from the MENA region can be an attractive option from an economic point of view. If investment risks are incorporated, however, lower import quotas of synthetic fuels are economically attractive for Europe: the higher generation costs are outweighed by the lower investments risks in Europe to a certain extent. Thereby, investment risks outweigh other factors such as transport distance or renewable electricity generation costs in terms of exporting MENA regions and a synthetic fuel import is especially attractive from MENA countries with low investment risks. Concluding, within this paper, detailed export relations between MENA and EU considering investment risks were modeled for the first time. These model results should be complemented by a more in-depth analysis of the MENA countries, including evaluating opportunities for local value chain development, sustainability concerns (including social factors), and optimal site selection.