Porsche's $100 Million Crusade to Future-Proof Internal Combustion
Porsche is a brand with trouble ahead, but it's a little hard to spot. It's not in the financials: Since its IPO last September, the company's share price has jumped by more than 40 percent. Likewise, while many manufacturers struggled through the pandemic and subsequent global supply chain woes, Porsche's sales barely dropped, then surged, going from 272,162 in 2020 to 309,884 in 2022.
Porsche even seems well-positioned to deal with the impending wave of emissions-free legislation, finding early success with the Taycan, launching an all-electric Macan soon, and pledging an 80 percent-electrified by fleet 2030.
It's only when you combine that legislation with Porsche's provenance that you begin to see the problem. 70 percent of all Porsches ever built are still on the road today. That's more than 700,000 911s alone. It's an enviable legacy that may soon become a bit of a burden. The upcoming ban on internal combustion sales, coming as soon as 2035 in places like California, threatens to send all those Carreras into museum collections.
Yes, the 2035 ban on internal combustion only applies to new cars, but it'll have immediate and drastic effects on demand. Start fiddling with the demand and the oil industry's supply is going to get complicated. Porsche, then, is looking at ways to create a new supply, placing a $100 million bet on an seemingly unlikely source: synthetic, emissions-neutral fuel. Chilean emissions-neutral fuel, which is exactly where we went to sample it.
Porsche has so far invested $100 million into the development of synthetic fuels, more commonly called e-fuels, a form of gasoline that literally comes out of thin air. Of that $100 million, three-quarters went to HIF Global, a synthetic fuels research company that turned around and built a prototype factory called Haru Oni near Punta Arenas, Chile. It's just down the road from Torres del Paine National Park, one of the most stunning places on earth, an untouched paradise and bucket list entry for serious hikers around the globe. Why plunk a factory down here? Because this is among the windiest places on earth, and wind is the key ingredient.
HIF estimates 6,000 hours per year of "good quality wind" -- that is, blowing at a constant rate in a constant direction. It's a remarkable sum considering there are 8,760 hours in a calendar year.
E-fuels start with hydrogen generated from electrolysis. This entails, basically, zapping water with electricity, splitting the bonds holding those H2O molecules together to emit pure hydrogen and pure oxygen. The hydrogen is captured and compressed, exactly the stuff you would use to power a fuel cell car like a Toyota Mirai.
It'll take some carbon in the mix to be something you can pump into your current daily driver. Right now, that carbon comes from a giant tank of carbon-dioxide, but Haru Oni will eventually pull CO2 from the air. That carbon is combined with the hydrogen to create the e-fuel in a process called synthesis.
The result is gasoline so authentic your engine can't tell the difference.
The final stuff coming out of the end of the long, tangled series of pipes at Haru Oni is a synthetic fuel that is 100% chemically identical to gasoline. 93 octane, to be specific, though higher or lower tests are possible if needed.
It's shelf-stable, storing easily in the same sort of can that you would use for normal gasoline. Pumps, hoses, and gaskets won't be affected, nor should any timing or compression changes be required unless your precious gem sups on race gas. Porsche's e-fuel even smells like the real thing, having the same sweet, acerbic effect on your sinuses as high-test of the fossil variety.
And, yes, e-fuel gives off carbon dioxide when it combusts, just like the real thing. So how is this any better than gasoline? Once Haru Oni's carbon capture system is online, all that carbon will come out of the air, so conceptually this is just a round trip, an exciting journey for those carbon atoms plucked from the air just a stone's throw from Antarctica and then released again out of the tailpipe of some classic Porsche idling its way onto the lawn at Pebble Beach.
Given the renewable nature of all the energy that went into the process, theoretically this whole dance is environmentally neutral, a product that can be pumped directly into any existing car and run with neither modification nor bad karma. But is it for real?
You don't need to get too close to a typical crude oil refinery to know that it's not doing any favors for the environment. The burning glow of the gas flares shooting flames into the sky are a strong indicator, partly why the refining of crude oil generates 4% of total global CO2 emissions.
So what are the emissions of the Haru Oni plant in Chile? Three things: Water, oxygen, and liquified petroleum gas. The water is sent back to the local water treatment facilities. The oxygen right now is vented to the atmosphere, but the plan in the future is to re-capture it for use elsewhere. And, as to the LPG, that's captured for external use.
A bigger concern is one of the inputs: water for the hydrolysis, which comes from the municipal supply. I feared this might be a problem, so I got an expert's opinion: Juan Carlos Jobet, the former Chilean Minister of Energy and Mining. "I think it's a great project," he said. "From a technical perspective, I think it shouldn't be an issue," he told me of the present water demands. Eventually, that water volume "could be big," but desalination of sea water would minimize any local impact.
Right now the plant is just in the prototype phase, operating with that single, 3.4-megawatt wind turbine. But, HIF Global plans a massive expansion, 300 MW of power from a field of wind turbines and a goal of 66 million liters of e-fuels a year, plus an estimated 400 jobs.
Though the emissions of the process may be environmentally neutral, Dr. Araceli Clavijo, a biologist and researcher at Argentina's National Scientific and Technical Research Council, says the overall facility may not be: "I imagine that the turbines are going to generate an environmental impact, on fauna, ecosystem services, communities, on the landscape. Is it better than oil production? Of course. Is it harmless? No." She also likened the economic inequality here to the lithium mining in the Atacama Desert to the north, used in EVs "that the majority of the population will probably not be able to afford in the same way that an average Chilean right now could not afford to use these fuels."
Initial production of 66 million liters, or 17 million gallons, of fuel per year figure sounds like a lot, but in reality Americans burn more than 20 times that every single day. HIF is planning similar plants in Texas and Tasmania, with an ultimate goal of 6.3 million gallons of e-fuel per day. That's getting significant, but it still leaves the question of how to distribute the stuff.
Porsche, for its part, for now only has rights to the fuel coming from this prototype facility, which will eventually power the cars at its various Experience Centers. In the future, might we see Porsche gas stations just like we have Tesla Superchargers today? No. "We will not make the fuel available at special pumps," Marcos Marques, manager for Porsche's e-fuels project, told me. "That's why it's so important that it is a drop-in." He envisioned a future where e-fuel could simply be mixed into the gasoline supply, effectively reducing and perhaps some day eliminating overall emissions.
Might e-fuels, then, make new, internal-combustion cars exempt from the planned 2035 zero-emissions legislation in places like California? "Almost definitely no in California," Professor Dan Sperling told me, "and other states will follow California." Sperling is distinguished professor and director of the Institute of Transportation Studies at University of California, Davis. "I suspect the appetite will be greatest for aviation, but not for cars or trucks, not in the US and probably not in the EU," he told me.
Sperling's skepticism is certainly well-founded when it comes to whether this technology will ever massively impact the global economy. But, Juan Carlos Jobet told me, you have to start somewhere. "How do you break the chicken and the egg problem? These projects are a good example of how you can do that. You sell the original production to a relatively small segment of the market that is willing to pay a high price. You demonstrate that the technology works, and then you can scale up the production to reduce costs and tackle a bigger market," he said.
For his part, Porsche's Marcos Marques says that it'll be up to governments to bridge the cost gap if e-fuels are ever to go mainstream: "There's no way that synthetic gasoline can get as cheap as crude oil," he said. But, as our environmental priorities continue to shift, and as internal combustion becomes more of a luxury than a necessity, perhaps there will come a time when those economies meet in the middle.
Putting it To The Test
My testing took place in a 2022 Porsche Panamera 4S Sport Turismo. Though it would pick up a healthy coating of Chilean dust and road grime, it was otherwise unmodified for my journey, which took place entirely on synthetic fuels.
To prove that, my trip from the Haru Oni plant started with a quick drive around back, where a very ordinary fuel pump awaited. Tank topped up with 33.994 liters of fuel (precision is important given the current cost of this stuff), I headed out into the Chilean wilderness to see whether Porsche's fake gas had the right stuff.
Chile's main roads in the south of the country are narrow and rough in spots but no challenge for the Panamera's air suspension. Things got more interesting when the Torres del Paine National Park began. Locals said that recent torrential downpours (which must have been something given how hard it rains here on a given day) had badly damaged many of the few paved stretches within the park. The result was a series of potholes numerous and deep enough to high-side a Panamera.
Road conditions actually improved when the asphalt finally ended, making way for the usual sections of washboarded gravel that will chew most road-going suspension solutions to bits in short order. So long as I kept the speeds down the Panamera had no problem, sliding nicely through the few corners where I had a chance to open it up a bit, but mostly just ushering me through the most remarkable set of surroundings I have ever been fortunate enough to see in my life.
And the e-fuel? How did that impact the experience? It didn't. As advertised, there was absolutely no difference in the car's behavior. Same sound, same feel, same everything. So, that question was answered. The technology works.
But that still leaves the question of whether e-fuels will really be the answer that so many Porsche long-term collectors are going to need. For that, we're just going to have to wait a little longer.
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