Multi-sectoral Impacts of H2 and Synthetic Fuels Adoption for Heavy-duty Transportation Decarbonization

Policies focused on deep decarbonization of regional economies emphasize electricity sector decarbonization alongside electrification of end-uses. There is growing interest in utilizing hydrogen (H2) produced via electricity to displace fossil fuels in difficult-to-electrify sectors. One such case is heavy-duty vehicles (HDV), which represent a substantial and growing share of transport emissions as light-duty vehicles electrify. Here, we assess the bulk energy system impact of decarbonizing the HDV segment via either H2, or drop-in synthetic liquid fuels produced from H2 and CO2. Our analysis soft-links two modeling approaches: (a) a bottom-up transport demand model producing a variety of final energy demand scenarios for the same service demand and (b) a multi-sectoral capacity expansion model that co-optimizes power, H2 and CO2 supply chains under technological and policy constraints to meet exogenous final energy demands. Through a case study of Western Europe in 2040 under deep decarbonization constraints, we quantify the energy system implications of different levels of H2 and synthetic fuels adoption in the HDV sector under scenarios with and without CO2 sequestration. In the absence of CO2 storage, substitution of liquid fossil fuels in HDVs is essential to meet the deep decarbonization constraint across the modeled power, H2 and transport sectors. Additionally, utilizing H2 HDVs reduces decarbonization costs and fossil liquids demand, but could increase natural gas consumption. While H2 HDV adoption reduces the need for direct air capture (DAC), synthetic fuel adoption increases DAC investments and total system costs. The study highlights the trade-offs across transport decarbonization pathways, and underscores the importance of multi-sectoral consideration in decarbonization studies.