Renewable fuels or CCS? Identifying drivers in net-zero transport and energy systems

Deep emission reductions in heavy transport sectors, such as long-distance aviation and shipping, require either large-scale substitution towards renewable fuels or continued fossil use compensated by carbon capture and sequestration. While renewable fuels rely on scarce resources including renewable electricity, hydrogen and biomass, compensation of fossil emissions is constrained by the cost and availability of CO₂ capture and the capacity for transport and sequestration. This study applies the sector-coupled energy system model Balmorel-OptiFlow to identify least-cost strategies for achieving a net-zero energy system in Western Europe by 2050. By endogenously optimising transport fuel supply and carbon management across multiple CO₂ value chains, and applying a one-at-a-time sensitivity analysis, the study identifies conditions under which the fuel mix shifts between renewable and fossil fuels. Biofuel deployment scales directly with biomass availability, whereas electrofuels are deployed only when low-cost electricity and hydrogen, or high fossil fuel prices, make them competitive with fossil pathways compensated by carbon capture and sequestration. Even under high renewable fuel uptake, carbon management remains central to the least-cost system, with 141–402 MtCO₂/yr sequestration across scenarios, driven by persistent fossil energy use for aviation and industrial heat.