With the successful completion of a market test on structuring funding design, the Federal Ministry for Digital and Transport (BMDV – Bundesministerium für Digitales und Verkehr) is paving the way for the market ramp-up of electricity-based liquid fuels (power-to-liquid, PtL).
A total of 16 project outlines from all over Germany were received as part of the test, the call for which was issued by the BMDV in August 2021. The focus of the funding will be on the production of PtL kerosene, as there is still a lack of climate-neutral alternative technologies, particularly in the aviation sector. Co-products of PtL kerosene production are planned for use in shipping and heavy-duty road transport.
Results from the market test improve funding design
The goal of the market test was to create a common base of information between the funding body (BMDV) and potential funding projects. The competitive funding procedure will ensure cost-efficient funding allocation and in turn, the highest possible contribution to funding objectives. These include cost reduction in PtL production, the market ramp-up of PtL technologies and the overarching goal of CO2 reduction in the transport sector with a focus on aviation. Thanks to the active participation in the market test, which illustrates the high level of commitment of PtL actors, valuable insights were gained for the structuring of the funding guideline. In addition to the comprehensive projects outlines that laid out in detail, technical as well as economic parameters of the projects, constructive feedback and optimization proposals for the funding design itself were also submitted. Many contributions emphasized the need for PtL project funding in order to facilitate market entry despite the still high costs. As well as cushioning the high investment costs, the funding would thus also mitigate the high operational costs.
Publication target of funding measure set for mid-2022
The data from the market test was evaluated by the BMDV and NOW and now serve as a basis for improving the design of the funding in a targeted way and for fleshing out the details. The publication of the funding guideline is set for the third quarter of 2022, subject to notification by the EU Commission and the publication of outstanding legal acts by the European Commission.
Whereas the funding guideline provides the legal basis for the funding, individual funding rounds will be launched by funding calls. The first funding call will be prepared in parallel and is to be published shortly after the funding guideline. The initial target is a technology-neutral call, with a production start by 2027 at the latest, taking into account the long planning and construction times. Further funding calls with later production start times are to follow.