Developers: De-risking technology and supply
early that few market references exist. The risks are considerable and varied, ranging from poor infrastructure and technology choices to transportation and supply security — all of it overshadowed by regulatory uncertainty. The winners will be those who move quickly, but while making informed choices about partners,
E-fuel project developers are conducting extensive feasibility and front-end engineering design (FEED) studies to reduce uncertainty in their cost estimates. But the lack of market references means projects can easily hit trouble. Another Quebec project serves as a cautionary tale. The $1.5 billion Recyclage Carbone Varennes (RCV) biomethanol plant filed for bankruptcy in March 2025 and was later acquired for just $17.5 million.⁵ Cost overruns undermined the project, which struggled with the technical and supply-chain requirements of e-fuel production. Although RCV used biomass gasification rather than electrolysis, its failure highlights a key risk for e-fuel developers: gaps in technical and logistical planning can undermine even the most well-funded projects. Developers often launch projects on a lump-sum engineering, procurement and construction (EPC) basis to control costs. But this can obscure risks and make projects vulnerable to cost shocks if planning doesn’t fully account for complex technical and supply chain requirements. Project developers should therefore ensure they carefully select engineering partners with deep knowledge in specialist technology such as catalysts and electrolysers. Supply-chain considerations are also crucial. To strengthen security and avoid stranded assets in the future, developers require guaranteed CO₂ and low- carbon electricity sources. Relying on partners whose supply chains pose risks or lack in-house expertise can jeopardise entire projects. The TES Canada project, for example, is locking in 100 megawatts of electricity from Hydro-Québec, plus a planned 1,000 megawatts from its own wind and solar farm near the facility. Ensuring facilities are close to the CO₂ feedstock supply is crucial. Carbon from captured CO₂ is much more complex and costly to transport than finished e-fuel, which can be shipped using existing infrastructure.
technology and supply chain logistics. What are e-fuels and why do they matter?
E-fuels are chemically almost identical to their fossil equivalents, but with a fraction of the carbon footprint. They are mainly produced by combining captured CO₂ from biogenic or industrial sources with low-carbon hydrogen, typically generated via water electrolysis powered by clean electricity. Their low-carbon profile, combined with their chemical and functional similarity to conventional fuels, makes them an attractive option for transport sectors that can’t be easily electrified, such as aviation and shipping. The e-fuel opportunity is compelling. The global market is expected to grow to $155 billion by 2034 from $16 billion this year, bolstered by mandates from regulators and international bodies such as the International Maritime Organisation.² Early buyers, such as logistics firms, airlines and shipowners, are already moving to lock in long-term supply agreements. The world’s first commercial-scale e-methanol plant began operations in Denmark in May 2025, with shipping giant Maersk committed to purchasing a portion of its annual production of 42,000 metric tons.³ Montreal-based TES Canada is building a $4 billion green hydrogen plant in Quebec that will combine captured CO₂ with green hydrogen to produce e-methane. Once injected into the existing natural gas grid — as planned with distributor Énergir — it will reduce the carbon footprint of the province’s gas supply without requiring changes to downstream infrastructure.⁴
24 | GHD | Nexus Magazine
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