No oil, no problem? Chinese start-up claims it can produce synthetic petroleum from air and water

A Shanghai-based start-up, Carbonology, has claimed it has developed a low-cost method to produce synthetic petroleum using air and water, as China ramps up efforts to find alternatives to traditional fossil fuels amid the ongoing US-Israel war against Iran, according to the South China Morning Post.

According to Chinese media reports, the company has developed a method that converts the carbon dioxide extracted from air and water into artificial fuel using renewable energy sources such as solar and wind. A member of staff at the firm has confirmed that the report was true; however, he refused to give further details.

The firm, co-founded in 2024 by a former Tesla vice president, said it has reduced production costs enough to offer synthetic petrol, diesel, jet fuel, and naphtha at prices competitive with market prices. The report added that the firm plans to roll out “large-scale production capacity in China”.

Carbonology is part of a growing group of Chinese companies exploring technologies that capture carbon dioxide directly from the air, an industry that is advancing but still viewed with caution by some experts. Over the past decade, direct air capture (DAC) methods have progressed from experimental stages to practical use. However, most of the captured greenhouse gases have so far been stored underground instead of being converted into usable fuel.

According to the SCMP, this development is part of China’s broader effort to cut its dependence on imported crude oil. Currently, the country imports more than 70 per cent of its oil, a large portion of which comes from the Middle East. Ongoing conflicts in the region have disrupted supplies and caused price fluctuations, highlighting the need for alternative energy sources.

How is it produced?

Scientists produce synthetic fuel (e-fuel) from air and water by capturing atmospheric carbon and splitting water into hydrogen and oxygen using renewable energy. These components are then combined through thermochemical processes, such as Fischer-Tropsch or methanol synthesis, to create hydrocarbon fuels (gasoline, diesel) that are compatible with existing engines.