The transition to low-carbon energy systems is reshaping global industrial, economic, and security landscapes. Among the many sectors affected, the military stands out as both a major consumer of energy and a strategically critical actor. Armed forces rely heavily on liquid fuels to power aircraft, naval vessels, and land vehicles — systems that are difficult to electrify due to energy density, range, and operational requirements. At the same time, geopolitical tensions and supply chain vulnerabilities have exposed the risks of dependence on imported fossil fuels.
In this context, renewable transport fuels, particularly synthetic fuels or eFuels, have emerged as a promising solution. Produced using renewable electricity, water, and captured CO₂, eFuels provide a way to utilise existing infrastructure while shifting the origin of carbon.
A compelling argument is that armed forces can act as “first movers” in the offtake of locally produced renewable fuels. By providing early, stable demand, militaries can accelerate industrial scale-up, enable project financing, and enhance national energy security. This blog post explores why the military is uniquely positioned to play this role, the strategic and economic implications, and the challenges that must be addressed.
The Strategic Energy Challenge of Modern Armed Forces
Modern militaries are among the largest institutional consumers of liquid fuels globally, with aviation typically accounting for the majority of demand. This dependence introduces structural vulnerabilities. Fuel must be transported through long and complex logistics chains, often across contested regions, making supply lines a critical point of exposure. At the same time, reliance on imported fossil fuels ties operational readiness to external actors and volatile global markets.
Recent disruptions to global energy systems have reinforced a long-standing reality: energy is not just an operational input, but a strategic dependency. In future high-intensity conflicts, secure and resilient energy supply will be as critical as weapons systems themselves.
Why Efuels Fit Military Needs
eFuels offer several characteristics that align closely with military operational requirements:
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Drop-in compatibility: Unlike hydrogen or battery-electric systems, eFuels can be used in existing engines, vehicles, and logistics systems without modification. This is crucial given the long lifespan of military equipment, often 40–70 years.
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High energy density: Military aviation, naval operations, and heavy land systems require fuels with high energy density. eFuels match conventional hydrocarbons in this regard, making them suitable where electrification is impractical.
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Storability and transportability: eFuels can be stored and transported using existing infrastructure, including pipelines and fuel depots, preserving operational flexibility.
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Local production potential: eFuels can be produced domestically using renewable electricity, water, and captured CO₂. This reduces reliance on imported fuels and enhances strategic autonomy.
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Climate and regulatory alignment: While military effectiveness is the primary objective, armed forces increasingly face pressure to reduce emissions. eFuels allow decarbonization without compromising operational capability.
The “First Mover” Concept: Military as Anchor Customer
The role of offtake agreements
A key barrier to eFuels is the “valley of death” between pilot projects and commercial scale. While the technology is proven, scaling production requires significant upfront investment in electrolysis, synthesis, and integration, combined with confidence in long-term demand.
Without guaranteed buyers, investors are reluctant to finance large-scale facilities.
This is where armed forces can play a defining role. Through long-term offtake agreements, they can provide the demand certainty required to unlock financing and move projects from concept to construction. Defence institutions bring a unique combination of scale, predictability, and creditworthiness—making them highly credible anchor customers
Historical precedent
Military demand has historically accelerated the adoption of transformative technologies, from jet propulsion to satellite navigation. eFuels present a similar opportunity, but with implications that extend far beyond defence. For example, the U.S. Navy’s biofuel-based fleet initiative stimulated early biofuel markets.
Local Production and Energy Sovereignty
Decentralised production
eFuel production enables a more decentralised and resilient energy system. Facilities can be located near renewable power sources and aligned with key logistics hubs, including military bases. This reduces reliance on long-distance fuel transport and enables more controlled, regional supply chains.
In practical terms, this means shorter supply lines, increased redundancy, and improved resilience in disruption scenarios.
For countries with high import dependency, particularly in Europe, this shift has clear strategic implications. Reducing reliance on imported fossil fuels strengthens energy sovereignty and limits exposure to geopolitical volatility.
Industrial Policy and Economic Spillovers
Creating a market
Military demand can play a critical role in shaping early markets for eFuels. By committing to long-term procurement, defence institutions can help establish predictable demand, support industrial scaling, and accelerate the transition from isolated projects to repeatable, standardised facilities.
As production increases, the same infrastructure can serve both military and civilian sectors, including aviation and shipping. This dual-use dynamic is particularly important. It allows early investments to extend beyond defence and contribute to broader industrial development.
In this sense, military offtake is not an endpoint, but a starting point for wider market formation.
Emerging Initiatives
The Royal Air Force has already conducted flights powered entirely by synthetic fuels, demonstrating technical feasibility and signaling future demand.*
At the same time, NATO-related research identifies synthetic fuels as a promising pathway for reducing emissions in military operations, with applicability across air, land, and maritime domains highlighted in broader defence analyses.**
Challenges and Limitations
Despite their potential, several challenges remain. eFuels currently require significant input of renewable electricity, which impacts overall system efficiency compared to direct electrification. Production capacity is still limited, and scaling will require coordinated expansion of renewable power, industrial infrastructure, and supply chains.
At the same time, demand is expected to grow rapidly across multiple sectors, including aviation and shipping, increasing competition for available volumes.
Addressing these challenges will require coordinated policy frameworks that provide long-term clarity and reduce investment risk.
Policy Implications and Recommendations
To enable armed forces to act as first movers effectively, several policy measures are needed:
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Long-term procurement commitments: Governments should establish clear targets for renewable fuel use in defence, backed by binding off-take agreements.
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Public-private partnerships: Collaboration between defence ministries, energy companies, and technology providers is essential.
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Financial support mechanisms: Tools such as Contracts for Difference (CfDs) can reduce price risk and incentivize investment.
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Infrastructure development: Investment in production plants, pipelines, and storage facilities is required to support local fuel ecosystems.
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Standardisation: Developing common fuel standards across allied forces (e.g., NATO) can enhance interoperability and market scale.
Broader Implications: Security Meets Sustainability
The convergence of defence policy and energy transition reflects a broader shift:
- Security is no longer military, it includes energy resilience
- Climate policy is becoming a strategic issue
- Industrial policy is intertwined with defence procurement
eFuels exemplify this convergence. They offer a pathway where military necessity, economic development, and environmental sustainability reinforce each other.
Conclusion
Armed forces are uniquely positioned to act as first movers in the adoption of locally produced renewable transport fuels such as eFuels. Their large, stable demand; long-term planning horizons; and strategic imperative for energy security make them ideal anchor customers for an emerging industry that faces significant scaling challenges.
By committing to offtake agreements and supporting domestic production, militaries can accelerate the development of eFuel markets, enhance operational resilience, and contribute to broader economic and environmental objectives. At the same time, this transition is not without challenges, particularly in terms of cost, scale, and energy efficiency.
Ultimately, the role of the military in this transition goes beyond fuel procurement. It represents a shift in how nations think about security: from a narrow focus on military capability to a broader understanding that includes energy independence, industrial strength, and climate resilience. In this sense, armed forces acting as first movers for renewable fuels are not just consumers, they are catalysts for systemic transformation.
Author
Jonas Alin, Project Director, Liquid Wind
Sources
Photo by Max on Unsplash
**https://www.enseccoe.org/publications/synthetic-fuels
