The concept is based on combining several established technologies. Renewable electricity is used to split water and produce hydrogen. CO₂ is then converted into synthesis gas and processed through **Fischer–Tropsch synthesis** to create liquid hydrocarbons that can be refined into fuels. Mitsubishi Heavy Industries demonstrated an integrated process producing liquid synthetic fuel from CO₂, water and electricity in 2026. The idea is particularly relevant for Japan, which has extremely limited domestic oil resources and has historically depended heavily on imported crude. Japan is therefore exploring synthetic fuels not only as a decarbonisation technology, but also as a way to improve **energy security**. Japanese government-backed programmes are supporting the development and commercialisation of CO₂-derived fuels. One of the most interesting aspects is compatibility with existing infrastructure. During Expo 2025 Osaka, ENEOS supplied synthetic gasoline to vehicles from several Japanese manufacturers, demonstrating that this type of fuel can be used in conventional vehicles without fundamental changes to their engines or fuel infrastructure. However, there is an important distinction: **the fuel is not literally "made from air and water" without an energy input.** Renewable electricity is the primary energy source. The process effectively converts renewable electricity into a dense, transportable chemical form. The environmental advantage comes from the carbon cycle. If the CO₂ used to manufacture the fuel is captured from the atmosphere, burning the resulting fuel releases that same carbon back into the atmosphere rather than introducing new fossil carbon from underground. The major challenge now is **scale and cost**. Producing synthetic fuel requires significant amounts of renewable electricity, electrolysis, CO₂ capture, chemical processing and infrastructure. Japan's challenge is to make the process efficient and economical enough to compete with conventional fuels. If successful, e-fuels could become particularly valuable in sectors such as **aviation, shipping and heavy transport**, where replacing liquid fuels with batteries remains difficult. Japan's experiment is therefore about more than creating alternative gasoline. It is about turning renewable electricity into a reusable liquid energy carrier — potentially combining **decarbonisation, existing infrastructure and energy security** in a single technology.