Integrating aviation’s non-CO2 effects into EU ETS: Impact of CO2eaccounting on operational and technological climate mitigationmeasures

To comply with defined ambitious climate goals, technical and operational improvements are required to reduce the climate impact of aviation. Non-CO2 emissions contribute to a majority of aviation’s total effect and a reduction of the associated climate impact is often associated with an increase in fuel consumption and CO2 effects. These trade-offs typically result in higher operating costs, which create a lack of economic incentive to pursue such measures, ultimately slowing implementation. Therefore, this study investigates implications from a market-based policy scheme designed to support the implementation of climate mitigation strategies by internalizing non-CO2 effects. An extension of the EU ETS to account for non-CO2 effects in terms of CO2 equivalents is modeled and resulting climate mitigation potentials and operating cost changes are analyzed. The results demonstrate the suitability of an extension of the existing accounting to non-CO2 effects as this reduces cost in relation to the reference without measure implementation. Furthermore, benefits of operational climate mitigation measures are demonstrated in comparison to the use of sustainable fuels. Technical efficiency improvements can further help to increase mitigation potentials and reduce operating cost, while reduced accounting shares can help to limit cost and ticket price increase.