An analysis of the damage costs and the prevention costs of CO2 emission from EEA aviation, policy options to internalise these costs, and the impact on ticket prices and demand.
The European Union has committed itself to reduce CO2 emissions in the transport sector with 90 percent by 2050, compared to 1990. On the other hand, international aviation is heading for a threefold increase in emissions from 2015 to 2050.
To make the European aviation sector (nearly) climate neutral, a transition is needed from fossil-fuelled kerosene to Sustainable Aviation Fuels (SAFs). This study calculates, among other things, how much that transition would cost until 2050, which fuel mix will be most likely and what CO2 price is needed to facilitate this transition.
The conclusion is that until 2050, the total prevention costs will be lower than the damage costs of CO2 emissions (without a transition to SAFs). This is the case for a transition to biofuels until 2032 and e-fuels from that year on. To enable this transition, a carbon price of 200 euros per ton in 2025 and 60-240 euros per ton in 2050 is needed.