A German company says it has created a synthetic diesel-like liquid distilled from atmospheric carbon dioxide: “Blue Crude.”

Sunfire, a German specialist in reversible electrolysis and fuel cell technology, says Blue Crude can be made from a process powered by renewable energy. The fuel is currently being produced at a pilot plant in Dresden, Germany, and is supported by the German federal government, automaker Audi and several venture capitalists, including Bilfinger Venture Capital, Total Ventures, KfW and Electranova Capital.

Sunfire says the power-to-liquids technology used in Blue Crude is able to achieve efficiencies of roughly 70%. Its production process features reversible electrolysis based on a solid oxide power core (rSOC), which generates hydrogen with an efficiency of 90%. The hydrogen then reacts with atmospheric carbon to create a mixture of hydrocarbon chains—the type found in conventional crude.

“The first critical question with any fuel is whether or not it’s compatible with the existing infrastructure. As a straight substitute for fossil fuels, Blue Crude certainly is," says Sunfire CEO Carl Berninghausen as quoted by Green Tech Media.

One determining factor for the success of this technology will be its cost efficiency.

"The final cost of the product is almost wholly dependent on the price of electricity,” says Berninghausen.

GTM Research storage analyst Ravi Manghani is quoted as saying that other costs could also act as a barrier to adoption.

“Most [fuel-cell-like] deployments have struggled to keep up production efficiency without requiring frequent stack or equipment replacement due to membrane or electrode degradation, which drives up costs,” Manghani says.

Currently, the Blue Crude pilot plant produces about 42.2 gallons of Blue Crude per day. In two to three years, it potentially could produce 475 gallons per hour, Sunfire predicts.