Decarbonization pathways for liquid fuels: a multi-sector energy system perspective

Abstract

Low-carbon liquid fuels play a key role in energy system decarbonization scenarios. This study uses a multi-sector capacity expansion model of the contiguous United States to examine liquid fuels production in deeply decarbonized energy systems, using representations of multiple liquid fuel pathways with harmonized carbon and energy balances to enable consistent system-level comparison across technologies. Our analysis evaluates how the shares of biofuels, synthetic fuels, and fossil liquid fuels change under varying assumptions about resource constraints (biomass and CO₂ sequestration availability), fuel demand distributions, and supply flexibility to produce different fuel products. Across all scenarios examined, biofuels provide a substantial share of liquid fuel supply, while synthetic fuels deploy only when biomass or CO₂ sequestration is assumed to be more limited. Fossil liquid fuels remain in all scenarios examined, primarily driven by the extent to which their emissions can be offset with removals. Limiting biomass increases biogenic CO₂ capture within biofuel pathways, while limiting sequestration availability increases the share of captured atmospheric (including biogenic) carbon directed toward utilization for synthetic fuel production. While varying assumptions about liquid fuel demand distributions and fuel product supply flexibility alter competition among individual fuel production technologies, broader energy system outcomes are robust to these assumptions. Biomass and CO₂ sequestration availability are key drivers of energy system outcomes in deeply decarbonized energy systems.