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”Nordic Sustainable Aviation”? Nordic Sustainable Aviation Preface The Nordic countries have high ambitions to become more environmentally sustainable. This ambition was further strengthened in January 2019 when the Nordic Prime Ministers signed “Declaration on Carbon Neutrality”. This declaration highlights transport as an important common Nordic challenge in the fight to reduce Greenhouse gas emissions. Aviation is probably one of the most challenging sectors to decarbonize. Although the Nordics seek to maintain leadership and cooperation in their climate efforts, aviation is a global enterprise where regional frameworks such EU-ETS and global agreements and conventions restrict the Nordic policy menu. The following publication was commissioned by the Danish presidency of the Nordic Council of Ministers (2020). The report has been prepared by the Institute of Transport Economics (TØI) and the process towards publishing and dissemination has been overseen by Nordic Energy Research (NER). NER is the platform for cooperative energy research and knowledge development that is used for policy development under the auspices of the Nordic Council of Ministers. NER also prepared a report in 2016 entitled “Sustainable Jet-Fuels for Aviation” and have since then worked closely with stakeholders in the Nordic aviation industry through the Nordic Initiative for Sustainable Aviation (NISA). In 2020, an update of the 2016 report was published. This report - “Nordic Sustainable Aviation”- complements the previous reports presenting current policy frameworks in each Nordic country and exploring alternative policy measures. Nordic Sustainable Aviation also explores sustainable aviation fuel (SAF) and the potential of electric aviation in the Nordics. The intention of this report is to explore challenges and opportunities for increased Nordic cooperation to increase the sustainability of aviation in Nordics, possibly with a trickle-down effect on the aviation industry globally. Nordic Sustainable Aviation presents current policy frameworks in each Nordic country and explores alternative policy measures. The report covers five policy measures and possible combinations of these; blending mandates, CO2 equivalent reduction requirements, establishing a joint Nordic SAF-fund or parallel national SAF funds, as well as various types of fuel and passenger taxes. These measures are complemented by a summary of distances, passenger loads between all airports in the Nordics. Suggested policy options include; A common Nordic vision for sustainable aviation backed by an ambitious joint target for the share of renewable energy in aviation by 2030. Such a plan should address both demand-side and supply-side measures with the aim of bringing up the share of SAF and stimulating the increased production of SAF internationally. Implementing a combination of a SAF- fund/SAF funds financed by joint Nordic passenger tax reduces the risk of carbon leakages and bridges the price gap between conventional jet-fuel and sustainable aviation fuels. The COVID-19 outbreak has led to a temporary significant decline in air traffic, changes in Nordic policy frameworks, and an aviation industry in need of substantial governmental economic support to stay in business. These changes are not fully accounted for in this report. It is nevertheless our hope that this report offers Nordic politicians’ guidance as to what is possible to achieve on a Nordic level independently, and what needs to be addressed within EU and in global bodies such as ICAO and UNFCCC. Klaus Skytte CEO, Nordic Energy Research Nordic Sustainable Aviation Contents 1 Summary and conclusions .................................................................................... 1 2 Introduction ...................................................................................................... 14 2.1 Strong growth in aviation and its emissions ........................................................... 14 2.2 A regulatory gap in international aviation ............................................................... 15 2.3 Ambitious goals for GHG reductions in the Nordic countries .................................. 15 2.4 Strategies to reduce emissions from aviation ........................................................ 16 2.5 Sustainable aviation fuel (SAF) ............................................................................... 17 2.6 Electrification ......................................................................................................... 18 2.7 Report structure and scope .................................................................................... 18 3 Overview of aviation in the Nordic countries ........................................................ 20 3.1 Internal and international travel patterns .............................................................. 20 3.2 Airline market shares ............................................................................................. 21 3.3 Future demand for aviation fuel ............................................................................. 22 3.4 Biomass potential for sustainable aviation fuels in the Nordics ............................. 23 4 Aviation and climate policy: International context ............................................... 25 4.1 Convention on International Civil Aviation, ‘The Chicago Convention’ .................. 25 4.2 International Civil Aviation Organization (ICAO) and Carbon Reduction and Offsetting Scheme for International Aviation (CORSIA)........................................ 25 4.3 EU regulation of relevance for common Nordic initiatives ...................................... 27 5 Perspectives for sustainable aviation in the Nordics ............................................. 33 5.1 Current national policies for sustainable aviation ................................................... 33 5.2 Nordic initiatives dealing with sustainable aviation fuels ....................................... 38 5.3 Electric aviation ..................................................................................................... 39 5.4 Possibilities for Nordic cooperation on electric aircraft .......................................... 46 6 Assessment of potential Nordic policy measures for sustainable aviation fuels ...... 48 6.1 Blending mandate and CO2-reduction requirements ............................................. 49 6.2 Taxation of aviation ............................................................................................... 55 6.3 Comparative impact assessment of the policy measures ....................................... 59 References .............................................................................................................. 68 Appendix A: In depth interviews and consultations .................................................... 82 Appendix B: Initiatives to promote sustainable aviation in the Nordics ........................ 88 B.1 Policy oriented stakeholder initiatives for sustainable aviation.............................. 88 B.2 Initiatives to promote sustainable aviation fuels .................................................... 89 B.3 Research and development initiatives on sustainable aviation fuel ....................... 91 B.4 Initiatives and research projects on electric aviation .............................................. 92 Appendix C: Calculation model for policy analyses .................................................... 98 Appendix D: Routes shorter than 200 km within and between the Nordic countries .... 102 Terms and abbreviations Advanced biofuel: biofuel following specific criteria, various definitions are applied. According to the Renewables Directive, advanced biofuels are; mostly cellulosic and lingo-cellulosic materials that cannot be processed with first generation biofuel technologies. Additionality: Carbon offsets should lead to additional projects that otherwise would not take place. Aircraft: a vehicle that is able to fly by gaining support from the air. Airplane: An aircraft with fixed wings. ASK: Available Seat Kilometres = Seat supply x flight kilometres. Biofuel: fuel based on biologic materials. Bio jet fuel: jet fuel coming from biologic materials, including forest residues (cellulosic biofuel), plant oils, algae, organic waste. Cabotage: Transport of goods or passengers between two places in the same country by a transport operator from another country CIS: Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan. CO2: Carbon dioxide. CO2e: CO2-equivalents, a summary of measures where all GHG’s are converted to CO2e with their relative GHG- CORSIA: Carbon Offsetting and Reduction Scheme for International Aviation. DAC: Direct Air Capture of CO2 EEA: European Economic Area = EU + Norway + Iceland + Lichtenstein. E-fuels: or electro fuels, or synthetic fuels: fuels where all or a significant share of the energy content stems from electricity based on renewable energy power to X (PtX). E-jet fuel: E-fuels that can replace fossil jet fuel. Other terms: power-to-jet (PtJ). EU: European Union. Eurocontrol: The European Organisation for the Safety of Air Navigation ETS: Emission Trading Scheme, EU’s regulatory system for tradeable CO2 emission permits. GHG-emissions: Greenhouse gas emissions; both CO2 and non-CO2 emissions. HEFA: Hydrogenated Esters and Fatty Acids, types of biofuels. HVO: Hydrogenated Vegetable Oils. IATA: International Air Transport Association. ICAO: International Civil Aviation Organization. IEA: International
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