There is a whole world in this synthetic fuels. And it is no wonder, since whoever can develop a renewable fuel, without harming the environment and with elements that we have in abundance, has won heaven. And in this regard, there is a Shanghai startup that promises to have taken a significant step. And if his claims hold up, it could change the rules of the game. We tell you the details.
Context. China imports more than 70% of the crude oil it consumes, and a considerable proportion comes from the Middle East. If you have been paying attention to this region of the planet in recent weeks, you will have seen that the thing is not very there. And at a time when conflicts in the Persian Gulf generate volatility in the markets and threaten energy supply chains, Beijing has been looking for alternatives to conventional fossil fuels for years. It is in this scenario where Carbonology emerges.
What exactly has he announced. Just like share SCMP, the company, co-founded in 2024 by a former Tesla vice president, claims to have developed a process to convert carbon dioxide (extracted from air and water) into synthetic fuel using solar and wind energy. The products it claims to be able to manufacture include gasoline, diesel, aviation kerosene and naphtha, all of them at competitive prices with those on the market. The company also reportedly announced that it is preparing a deployment to produce its product on a large scale in China.
How this technology works. The process the startup describes is based on direct air capture, known in the industry as DAC (Direct Air Capture). This technique consists of extracting CO₂ from the atmosphere and combining it with hydrogen, in turn obtained through electrolysis of water using renewable energies, to synthesize liquid hydrocarbons.
The result is fuels that are practically identical to those derived from petroleum, but whose carbon cycle is closed: the CO₂ they emit when burned is the same as that captured to manufacture them. It is really not a new process, as it has been developed for years in laboratories around the world and There are pilot projects underwaysuch as the Haru Oni plant, in southern Chile, promoted by companies such as Siemens and Porsche.
What is still unclear. The bad thing is that Carbonology’s claims lack details. According to the mediuma company spokesperson confirmed the information but declined to offer more information on the matter. As SCMP shares, the company has a registered capital of just over 14 million yuan (about $2 million) and completed a first round of financing last year. In January it opened a 300 million yuan R&D center in Shanghai, along with a synthetic kerosene production line.
In any case, the company recognized that its future commercial operations will probably have to be located near large solar and wind energy facilities in western China, since it is a process with high energy demand.
A problem that persists. Synthetic fuels produced from renewables remain expensive. The medium refers to paper published in January 2025 in the journal Energy Conversion and Management, where some of the obstacles to its commercialization were identified, including high capital intensity, low energy efficiency in the conversion and absence of infrastructure and regulatory frameworks that allow its large-scale deployment.
About Repsol. In Spain, the main company that has promoted renewable fuels in its gas stations has been Repsol, although the concept in this case is different. Repsol comes from a process that reuses used cooking oilremains of agricultural processes and forestry waste to develop its Nexa fuel, which is already sold in hundreds of gas stations in the country.
However, the company is also studying the DAC technique to produce synthetic fuels. It does this through a cutting-edge project in the Port of Bilbao (Petronor). At the moment what they have is a demonstration plant, so we will have to wait to see if it has an outlet.
for the car. That a Chinese startup barely a year old claims to have solved the cost problem that has blocked the entire industry is, at the very least, interesting, but there is a lack of data to support it. DAC technology exists and is maturing, but most of the CO₂ captured so far is stored underground, not converted into fuel. That the announcement was made under these circumstances is curious, to say the least. So we will have to wait to see if this project ends up materializing and fulfills what it promises.
Cover image | ADIGUN AMPA
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