Low-carbon “drop-in replacement” transportation fuels from non-food biomass and natural gas

We assessed the technical and economic viability of small-scale plants producing “drop-in replacement” transportation fuels from non-food biomass and capturing and storing byproduct CO₂ in spent shale-gas wells. Additional designs considered co-processing of natural gas — the least carbon-intensive fossil fuel — to increase liquid-fuel yields and plant efficiency, with some penalty in greenhouse gas (GHG) emissions footprint. For fuels from first-of-a-kind facilities to be cost-competitive with petroleum-derived fuels when crude oil costs $100/bbl, an effective GHG emissions price in excess of $250/tCO_2,eq would be required. If lower production costs are achieved in successive facilities via innovation and experience, fuels from future plants may become cost-competitive at crude oil prices as low as $85/bbl in the absence of any GHG emissions price, and at $50/bbl with a GHG emissions price of $135/tCO_2,eq, which the Intergovernmental Panel on Climate Change suggests is an emissions price level needed before 2050 to induce the emissions reductions needed to limit global warming to 2 °C.