A way to promote CO2-emission free fuels for transportation

Question:Which market-based approaches encourage adoption of clean technologies?
on 08/09/2016

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Liquid ammonia, also called anhydrous ammonia, was used as the fuel for buses in Belgium during WWII because all available gasoline was used up by the German military. Today, ammonia (NH3) is one and only readily available solution if we wish to drastically reduce CO2 emissions from transportation sector by moving away from hydrocarbon fuels.

A number of well-documented research projects, some carried out in Canada, have demonstrated that a modern car engine can be modified to run on ammonia fuel. Burning ammonia produces no CO2. In that respect, ammonia fuel is similar to hydrogen but with one major advantage – the on-board storage problem is greatly resolved in the case of ammonia which means an ammonia-powered car can have a range similar to a standard gasoline fueled car.

The traditional process of synthesizing ammonia emits large amount of CO2. Therefore using traditionally produced ammonia as car fuel would simply move the emission from tail pipe to the ammonia factory. CO2-free synthesis processes do exist but the ammonia thus produced is significantly more expensive. The challenge in switching to ammonia fuel today is economics, not technical.

Governments can make CO2-free ammonia competitive in price to gasoline and diesel in two ways. The first is to impose carbon tax on the hydrocarbon fuels. This option is not fully supported by the oil and gas industry, or by the provinces whose economy relies heavily on oil and gas. The second is to allow commercial production and sale of synthetic fuels tax free provided the whole synthesis process is truly CO2 emission free or CO2-neutral. This option is perhaps more palatable to all parties concerned. For governments, tax exemption will not cause loss of revenue since no one is currently selling CO2-free fuels. It will be acceptable to oil and gas industry as well since it does not push up the price of their product.

Another attractive feature of CO2-free ammonia is that the raw materials needed are water and air, and the whole cycle is self-contained: the oxygen need for combustion is deposited in the air in advance (i.e. during the synthesis), nitrogen taken from air is returned to air, and exactly the same amount of water used is reformed by combustion. The only net effect is the transfer of energy, usually in the form of electricity originally, to the car. This feature allows production of ammonia to take place almost anywhere in Canada including oil producing provinces. It is conceivable that oil and gas industry will slowly scale down the production of hydrocarbon fuels and ramp up the production of ammonia. Even if transitioning to CO2-free fuels were to begin immediately, the process will take many years. This means the investment already made by the industry in machinery and refineries will not be wasted. These facilities will be used till the end of their natural service life. We also note that production of oil will never be completely eliminated. After all, oil is a non-replaceable raw material for chemical industry (plastics, for example) and will continue to be needed.

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