Global cost drivers and regional trade-offs for low-carbon fuels: a prospective techno-economic assessment

Abstract

Low-carbon fuels (LCFs) such as green hydrogen, synthetic hydrocarbons, and biofuels are critical for decarbonizing sectors that are difficult to electrify. In this study, we present a globally harmonized techno-economic assessment of 21 LCF production pathways, including power-to-X, biomass- and sun-to-liquids, and multiple hydrogen routes, evaluated across all countries and three future scenarios for 2024, 2030, and 2050. The model integrates spatially explicit resource data, learning-driven capital cost trajectories, and a dynamic, country- and technology-specific cost of capital, supported by robust scenario and uncertainty analysis. By 2050, median levelized costs are projected at 0.07 to 0.10 EUR₂₀₂₄ per kWh for green hydrogen, 0.15 to 0.18 EUR₂₀₂₄ per kWh for power-to-liquid kerosene, and 0.14 to 0.20 EUR₂₀₂₄ per kWh for most bio-based aviation fuels, reflecting both substantial progress and persistent regional disparities. Our results show that while innovation, technology learning, and deep power sector decarbonization can unlock cost-competitive electrofuels in countries with abundant renewables, bio-based routes are frequently cost competitive for sustainable aviation fuel (SAF) production in near-term scenarios, and solar-to-liquid fuels remain constrained by feedstock and capital barriers. The emergence of nuclear- and methane-based hydrogen as primary options in many regions, as well as the dominance of turquoise hydrogen in Russia, the Middle East, and Central Asia where carbon management is viable, highlights the context-specific nature of future low-carbon fuel systems. We also find that the least-cost logistics for global hydrogen trade will shift from ammonia shipping to pipeline and methanol delivery, with North Africa and Iberia emerging as leading suppliers to Europe. These findings underscore the need for integrated innovation, policy coordination, and investment strategies that address both resource and financial barriers, in order to achieve scalable, resilient, and cost-effective low-carbon fuel supply chains worldwide.