Electrofuels (or e-fuels) are synthetic fuels that are created by combining electrolysis derived hydrogen with a carbon molecule (e.g. biogenic CO₂ or CO₂ from direct air capture) to make a gas or liquid fuel. These fuels are identical in composition to conventional hydrocarbon fuels and can use existing infrastructure. An additional advantage is that they contain virtually no other contaminants. The technology to make e-fuels exists already, yet costs are high and uptake of these fuels will take time. European SAF mandates include e-SAF from 2030.

Within e-fuels, Cepsa has a particular focus on e-methanol. Alongside partner company C2X, the firm is investing in a €1b ($1.1b) e-methanol plant in Huelva, with FID expected in 2025.

The plant would become one of the largest e-methanol producers in the world, with a production capacity of 300,000t/yr initially and a potential maximum production capacity of 1mt/yr should the market further develop.

“Developing projects in stages like this is important to us as a company, because on the one hand we need to achieve a certain scale to get competitive production, but on the other hand we need to manage risks, such as regulatory changes, improvements in technology or changes in the demand landscape,” said Joaquin Rodriguez, director of hydrogen and clean power at Cepsa.

Hydrogen for the facility will be partly supplied by Cepsa’s planned electrolyser at the La Rábida energy park in Huelva and distributed to the methanol facility via the hydrogen distribution ring.

Biogenic CO₂ for the facility will be provided by the Huelva biofuels plant being constructed in partnership with Bio-Oils.

C2X is majority owned by shipping firm A.P. Moller Holding with A.P. Moller-Maersk as minority owner. The e-methanol produced by the plant will be primarily used for marine bunkering in Huelva, which C2X and Cepsa plan to turn into Europe’s primary hub for the fuel.

“Maersk is paving the way of using methanol as a fuel in maritime,” said Rik Sneep, director of strategy and transformation at Cepsa. “Methanol has a big advantage in that it has been used for many years in various industries.”

Methanol is likely to be a key vector for decarbonising the maritime industry. The adoption of the IMO interim guidelines for ships using methyl or ethyl alcohol as fuel in 2020 has been an enabler for shipowners ordering methanol-fuelled ships.

By 2050, global demand for methanol could triple to some 300mt/yr, with the majority of this being met by e-methanol, according to a study by consultants McKinsey.

In 2023, methanol was the most popular alternative fuel choice to traditional fuel oil, with 138 methanol-powered ships being put on order, according to research firm DNV’s Alternative Fuels Insight—principally container ships.

Maersk itself will have 18 large methanol-powered vessels delivered across 2024 and 2025 and the shipping firm last year launched its first ship running on the fuel.

With the methanol plant in Huelva and the ammonia plant in Algeciras, and bunkering operations in both ports, Cepsa can offer various decarbonisation solutions to shipping companies as they look to transition away from fuel oil.

“We have ongoing conversations with several shipping companies on both ammonia and methanol to understand what they are looking for and how we can work together to provide the right solution in the right place at the right time,” said Sneep.


Cepsa’s 2030 annual SAF target of 800,000t will be largely met from biofuels.

But from 2030, EU mandates require e-SAF to form 1.2% of overall SAF consumption, increasing to 50% by 2050.

This is partly for environmental reasons and partly to diversify supply as second-generation feedstock will be limited. SAF produced from waste can reduce lifecycle CO₂ emissions by up to 90% compared to conventional jet fuel, while synthetic SAF (e-SAF) has the potential for up to 100% CO₂ reduction in the future.

But e-SAF is still in the development stage. It currently costs around eight times more to produce than conventional jet fuel and two to three times the cost of SAF made from bio-fuels.

As demand rises and technology costs fall, the plant being constructed with C2X in Huelva could be used to produce e-SAF.

“For methanol we already have a market. But as demand develops we can use the same feedstocks to produce e-SAF as we need it,” said Rodriguez. “We will be ready to meet the 1.2% blending target, and perhaps even go beyond it. Some of our customers are starting to signal they will have strong levels of demand for the fuel in the future.”

Innovations in carbon sourcing, which enable the securing of carbon monoxide from industrial sources instead of having to process CO₂, as well as the falling cost of hydrogen as the technology scales, will be key in helping e-SAF reach cost parity with other SAF pathways such as biofuels. Investment in the development of refineries will also help scale production and drive costs down.


Cepsa’s goal is to store and transport hydrogen in the form of final products—be it e-SAF, e-methanol or ammonia—as much as possible.

“We are developing enough storage capacity in dedicated port terminals in Huelva and Algeciras to be able to cope with the flexibility of our production, and at the same time meet the demand of our customers,” said Rodriguez.

However, the firm will construct some 20–40t of pure hydrogen storage capacity to account for the intermittency of renewable supply to the electrolysers.

“It will be minimal storage capacity because hydrogen storage is costly, takes up a lot of space, and you need to treat the fuel very carefully,” Rodriguez added.

As Spain’s hydrogen pipeline network is developed Cepsa will work with transmission system operator Enagas to develop more centralised hydrogen storage solutions.

“There are some suitable locations in Spain that—once connected with the pipeline network—offer the potential for massive storage,” said Rodriguez.

A study by the HyUnder project found that there are four particularly suitable underground storage locations for hydrogen in Spain. One of these locations is in southern Spain, near Gibraltar, and another is on the east coast. Both could easily be connected to Cepsa’s hydrogen ring.

This article is taken from the special report Positive Motion: Enabling Europe’s Green Hydrogen Ecosystem, produced with Cespsa To read the report in full, click here.



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