The Economic Sense Behind Fuel Additives

One Austin-based startup is changing the alternative energy sector with its revolutionary nanotechnology-powered additive.

As the world prepares for a more sustainable future, the economics underlying alternative energy sources have increasingly come under the scanner.

While the promise of alternative energy is attractive, the reality is that many sources don’t make economic sense just yet due to scalability issues.

Currently, improving internal combustion efficiency makes the most sense. Given that the majority of the world’s vehicles use gasoline or diesel, fuel additives have quickly positioned themselves as the best solution.

Fuel additives have long been used by the fuel manufacturing industry but their sustainability record is patchy. Most additives don’t work as promised or don’t make economic sense.

However, one Austin-based startup is changing all of that with its revolutionary nanotechnology-powered additive.

Scalable Technology

Kirill Gichunts, a serial entrepreneur, together with a team of PhD scientists and engineers founded FuelGems. Their mission: To create a fuel additive that would reduce toxic emissions and prolong engine life.

Toxic chemicals in fuel pose a dual-threat. While they pollute our atmosphere and bring about the early onset of diseases such as lung cancer and other respiratory illnesses, they also damage vehicle engines and reduce their efficiency.

An inefficient engine burns more fuel, pollutes more, and costs more to run in the long term.

It makes economic sense for fleet management companies and fuel manufacturers to build sustainability and efficiency into their business models, while taking responsibility on decreasing the harmful impact fuel has on the environment.

One of the biggest breakthroughs that Gichunts and his team have achieved is that their additive requires just a small amount to be added to fuel. Just 1 to 5 grams of FuelGems’ additive is enough to treat 264 gallons of fuel.

This amount needed is almost 800 times lower than existing fuel additive solutions.

As a result, treating vast quantities of fuel has become cost-effective, and fuel manufacturers can differentiate their fuel from competing variants. However, the revolution doesn’t stop there.

Sound Business Economics

FuelGems’ initial growth was supported by Austin-based venture capital fund and startup accelerator Sputnik ATX and the company has successfully on boarded pilot projects with the likes of OMV, a large oil and gas distributor, a publicly traded farming company, and an undisclosed fleet operator. Currently, FuelGems has generated interest from the likes of BP, Suncor Energy, and Marubeni.

Of particular note is the ease with which FuelGems’ solution can be added fuel. It can be mixed into fuel storage tanks, added during the refining process, or even added directly to vehicle fuel tanks.

Due to the low amount of additive required, FuelGems can price its solution up to 20 times lower than its competitors.

The fuel market is valued at close to $3.5 trillion, and the fuel additives market has an estimated size of $45 billion. It isn’t just the additives market that FuelGems is uniquely positioned to take advantage of.

The nanoparticle market is also heating up, with some estimates indicating it could hit a size of $50 billion by 2026.

Sustainable Demand

While alternative energy sources will make rapid strides over this decade, the fact is that these technologies will not be adopted by the mainstream market immediately.

Even if developed economies around the world install infrastructure and adopt these alternative sources, it’s going to be a while before the developing world adopts them.

According to reliable estimates, 1.5 billion light-duty vehicles on the road will still be powered by internal combustion engines. As a result, the fuel additives market isn’t going anywhere soon.

Given FuelGems’ ability to cost-effectively generate enough additives to treat many tons of fuel every day.

Towards a Cost-Effective and Sustainable Future

While reducing emissions and improving engine efficiency is important, cost-effectiveness was a factor that wasn’t always taken into consideration.

Thanks to FuelGems’ solution, this is no longer the case. As the world prepares to tackle climate change, there is now a solution that makes scientific and economic sense.

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