Audi AG held a topping-out ceremony recently for a new plant in Germany that will be the world’s first manufacturing facility for producing synthetic methane, or “e-gas,” along with renewable electricity. The facility is scheduled to begin operations early in 2013 and begin feeding e-gas into the local natural gas distribution network by summer.

And since in Europe and other places around the globe, hydrogen is catching on fast as an alternative transportation fuel, Audi is billing the new facility in Werlte, Germany as a source of synthetic methane that can be pumped into the natural gas pipeline infrastructure.

“The e-gas project marks a transition toward alternative forms of energy for automobiles,” said Reiner Mangold, head of Audi’s sustainable product development. He said fuel produced can be used in Audi’s compressed natural gas (CNG) vehicles.

The e-gas is the byproduct of a chemical reaction with hydrogen that is derived from electrolysis and carbon dioxide (CO2). “Chemically speaking, this e-gas is nearly identical to fossil-based natural gas,” Audi said. “As such, it can be distributed to CNG fueling stations via the local natural gas pipeline network to power vehicles starting in 2013.”

Audi describes the e-gas as “energy rich,” and thus, ideal for internal combustion engines. The Werlte facility is designed to produce enough fuel to power 1,500 new compact, five-door Audi A3 Sportback TCNG vehicles 15,000 kilometers annually. No cost figures for the plant or the fuel byproduct were given by Audi.

The Audi plant is located on a site owned by German natural gas, electricity, telecommunications and information technology provider EWE AG, covering nearly 45,000 square feet. It is drawing its CO2 as a waste product from a nearby biogas generation plant operated by EWE.

“The CO2, which would otherwise pollute the atmosphere, is chemically bonded into the fuel at the Audi e-gas plant, making the fuel climate neutral,” Audi said.

Longer term, the hydrogen produced at the plant could be used to power fuel-cell vehicles, Audi said. Eventually both forms of the fuel could be used when a hydrogen infrastructure is developed in Europe, the automaker said.

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