Designing efficient policy mixes for climate-neutral aviation: An abatement cost approach comprising synthetic fuels and DACCS

• In Event: Policy Pathways in Energy and Aviation Transitions

Abstract

The aviation sector faces mounting pressure to meet net-zero climate targets amidst growing demand and limited scalable mitigation technologies. Over 85% of international aviation activity is committed to participating in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), and multiple jurisdictions are currently designing policy interventions to address this challenge. A key question in this context is the technology specificity of these interventions, particularly the roles of direct air capture and storage (DACCS) and DAC-based synthetic fuels (synfuels).This paper compares the long-term abatement costs of DACCS and DAC-based synfuels, emphasizing the need to account for both CO2 and non-CO2 climate effects in achieving climate-neutral aviation. We examine emission reduction measures such as contrail avoidance through re-routing, hydrotreatment of kerosene, and lean combustion engines, assessing their impact on the costs and effectiveness of these two pathways. The abatement cost projections are then used to inform the design of policy interventions.Our methodology begins with a meta-analysis of current and future abatement cost projections for DACCS and synfuels, considering their potential to mitigate both CO2 and non-CO2 impacts. Non-CO2 effects, which represent about two-thirds of aviation's total climate impact yet are often overlooked, are incorporated to evaluate their influence on efficient policy choices. To further estimate the costs and reduction potential of CO2 and non-CO2 impacts through contrail avoidance, hydrotreatment of kerosene, and lean combustion engines, we conduct expert interviews to triangulate data from academic literature and grey reports. All data points are integrated into a comprehensive techno-economic model that incorporates climate model components to compare the abatement costs of DACCS and synfuels.Our analysis shows that DACCS is more cost-competitive when considering only CO2 emissions, with synfuels being approximately twice as costly in the long term. However, when non-CO2 effects such as contrails and nitrogen oxides are included, synfuels can become more cost-effective in some scenarios. Nevertheless, when factoring in emission reductions through contrail avoidance via re-routing, DACCS regains a cost advantage, as fossil fuel-based kerosene already results in lower CO2-equivalent emissions.This study underscores the importance of incorporating non-CO2 emissions in evaluating long-term abatement costs for effective and efficient policy design. It also suggests that the relative cost advantage of synfuels may diminish when strategies such as contrail reduction through flight routing optimizations are considered, as these strategies can reduce the overall climate impact of fossil fuels offset by DACCS, thereby reducing the cost-effectiveness of synfuels due to their lower lifecycle emissions. Our findings provide critical insights for designing effective and efficient aviation decarbonization policy mixes.

Authors

• Bjarne Steffen, ETH Zurich
  Presenting Author

• Tobias S Schmidt, ETH Zurich
  Non-Presenting Co-Author