The Introduction of Sustainable Aviation Fuels - Challenges and Options

The aviation industry is challenged to reduce its climate impact. The most promising strategy, at least in the short- to medium term, will be the introduction of sustainable aviation fuels (SAF). These fuels feature substantially reduced carbon life-cycle emissions in comparison to fossil fuels. In Europe, a mandatory quota for the use of sustainable fuels will most likely be introduced, starting in the year 2025. The introduction of a blending mandate by governments and the European Commission is associated with a range of challenges. The purpose of this paper is to discuss the economics of climate change mitigation in aviation and the role SAFs can play. The economic issues associated with the introduction of SAFs are analyzed, with a particular focus on the European Commission’s proposal for a blending mandate. Several suggestions for improvement are discussed. Despite its relatively high costs, a key finding of the discussion is that SAFs will play an important role in the decarbonization of aviation