New Delhi, March 19: A Shanghai-based startup, Carbonology, has announced a major innovation in clean energy, claiming it can produce synthetic fuel using only air and water. The company says its breakthrough “e-fuel” technology could transform the global energy landscape, especially at a time when oil supply chains remain uncertain due to geopolitical tensions.

The process relies on Direct Air Capture to extract carbon dioxide from the atmosphere, while hydrogen is generated by splitting water using renewable energy. These elements are then combined through advanced chemical synthesis to create petrol, diesel, and even jet fuel that are chemically identical to conventional fossil fuels. This means existing vehicles and aircraft can use the fuel without modifications. Crude Oil Surges Above USD 103 Barrel As Iran Warns Strait of Hormuz May Not Return to Pre-War Status.

Carbonology claims it has solved one of the biggest challenges in the sector: cost. While synthetic fuels have traditionally been expensive, the company says its method is now competitive with current fuel prices. This development is particularly significant for China, which imports over 70 percent of its crude oil and is seeking greater energy independence. Indian-Flagged Crude Oil Tanker ‘Jag Laadki’ Arrives at Mundra Port With 80,886 MT UAE Crude, Boosting Supply Amid Global Tensions (Watch Video).

However, experts remain cautious. The process is highly energy-intensive, and its environmental benefits depend entirely on the use of renewable energy. Scalability also remains a key concern, as most carbon capture technologies today focus on storage rather than fuel conversion.

If proven viable at scale, this “fuel from air” technology could offer a sustainable solution for industries like aviation and shipping, where electrification remains difficult. For now, all eyes are on Carbonology as it moves toward large-scale production.

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(The above story first appeared on LatestLY on Mar 19, 2026 03:45 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).