Porsche to build Australian efuels plant in Tasmania, operational from mid-2026

July 8, 2022: Porsche to build Australian efuels plant in Tasmania

Porsche has announced its Australian plant for efuel production will be located in the north-west of Tasmania, with operations slated to begin in 2026.

After the German manufacturer announced its plans to build a local facility in April (see below), it has now locked in the HIF (Highly Innovative Fuels) Tasmania Carbon Neutral eFuel Plant as its first commercial-scale facility to be built in Australia.

Slated to have a 40-year operational life, the 250-megawatt facility promises to use renewables to produce green hydrogen, projecting production outputs of over 100 million litres of carbon-neutral efuels annually, with the ability to pump out up to 190 tonnes a day.

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Porsche estimates the switch to efuels will result in a drop in CO2 emissions of roughly 260,000 tonnes per year, allowing internal combustion engines to continue on despite tightening emissions nets globally.

The development phase of the plant starts now – beginning with finding a location in the Apple Isle – while construction is expected to begin in 2024 before production kicks off halfway through 2026.

HIF is currently constructing the Haru Oni Demonstration Plant in southern Chile, applying lessons learned from the South American facility to its north-west Tasmanian site.

Read on below to find out more about Porsche's investment in synthetic fuels.

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April 7, 2022: Porsche to create synthetic fuels in Australia

Porsche is to invest almost $100 million in the development of efuels – in part by building a production facility here in Australia within the next four years.

The German sports car manufacturer announced it is investing US$75 million (AU$99 million) in Chilean company HIF Global LLC as part of acquiring a long-term stake in the business.

HIF Global LLC is responsible for building the Haru Oni efuel plant in Chile that Porsche is heavily involved in, alongside partners Siemens Energy and ExxonMobil.

As part of the increase in investment, an Australian synthetic fuel plant is expected to be constructed, and potentially fully-functioning around 2026. This facility would use renewable energy to create carbon neutral fuels that can be used in vehicles on Aussie roads today.

The deal also includes the construction of a synthetic fuel production facility in the US.

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It is expected a future Australian synthetic fuel plant would be similar in size to the Haru Oni facility being built in Chile, with a build time of roughly two and a half years.

Construction on the Haru Oni plant is expected to be completed next year, with an aim to produce 55 millions litres of synthetic fuel at that location by the end of 2024, and onwards to 550 million litres two years later. An Australian facility's outputs would be similar.

A location for the Australian plant is yet to be determined. Currently options in North Queensland, Victoria, and Tasmania are being evaluated.

The ready availability of constant renewable energy, as well as relative proximity to appropriate infrastructure are key factors in deciding the final location.

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Porsche has been at the vanguard of synthetic fuel proliferation. On top of its monetary investment, its 718 Cayman GT4 RS road car has been developed to run on synthetic fuel, as well as the 911 GT3 Cup race car. In fact, the entire Porsche Supercup field will race using a biofuel this year.

“Efuels make an important contribution to climate protection and complement our electromobility in a meaningful way,” said Barbara Frenkel, Member of the Executive Board for Procurement at Porsche.

“By investing in industrial efuel production, Porsche is further expanding its commitment to sustainable mobility. In total, our investment in the development and provision of this innovative technology amounts to more than US$100 million (AU$132 million).”

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While synthetic fuels can be used in modern road cars without the need for modification, the major use for the technology, at least initially, will be in the world of motorsport.

It is important to note that synthetic fuels will play an important part in Porsche’s wider push to reduce company-wide emissions. It is still forging ahead with its move toward electrification with the next generation Cayman and Boxster both confirmed to utilise battery-electric powertrains when they are put into production.

Australia is a safe haven for internal combustion vehicles given our relative lack of emissions regulations when compared to places like the European Union. This means that Porsche could still send vehicles Down Under that would otherwise be outlawed in Europe. Synthetic fuel, and in particular synthetic fuel produced in Australia, would help offset any of those vehicles’ emissions when Porsche is calculating its global fleet’s CO2 outputs.

The synthetic fuel being produced by the Haru Oni plant is estimated to cost roughly $13 a litre to produce, with Porsche CEO Oliver Blume previously publicly stating that this needs to be in the region of $5 a litre for the technology to be viable.

One of the major factors in bringing that cost down is the price of producing renewable energy, while increasing taxes on fossil fuels through government excises is also expected to level the playing field.

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Porsche isn’t the only one putting money toward HIF Global LLC, with Chilean company Andes Mining and Energy, and American companies EIG, Baker Hughes Company and Gemstone Investments also pitching in on the financing.

In total Porsche says a figure “in the low nine-figure USD range” (in excess of $AU1 billion dollars) has been invested.

Andes Mining and Energy will remain the majority stakeholder in HIF Global LLC, with the additional invested capital being put towards developing synthetic fuel facilities in Australia, as well as Chile and the United States.

The investment means Porsche now holds a roughly 12.5 per cent stake in HIF Global LLC. The deal is pending final approval by relevant antitrust authorities.