A market and profitability analysis of biofuels in aviation
A market and profitability analysis of biofuels in aviation
Original title: Marknadsanalys och affärsmodell gällande lönsamhet av biobränsle för flygplatsfordon och luftfarkoster, med inriktning på icke-statliga, regionala flygplatser i Norrland
Aviation is an important part of the Swedish transport system. In a large and sparsely populated country likes Sweden, air travel is necessary in order to connect different parts of the country. However, the use of fossil fuels in air traffic leads to emissions of greenhouse gases, contributing to global warming. At the same time, biofuels for aviation are currently 2-4 times as expensive as fossil-based jet kerosene, meaning that a more environmentally friendly air transport sector might come at the cost of high connectivity becoming more expensive.
In light of these challenges, Copenhagen Economics was asked by the Swedish Transport Administration to analyse the possibility of achieving 100 per cent use of biofuels at regional, non-governmentally owned airports in northern Sweden while limiting the cost of ensuring high connectivity in the region.
The main conclusions of our study are:
The low share of biofuel uptake today is due to barriers both on the supply and demand side
Today, there is a lack of economic instruments directed at the aviation sector, needed to overcome these barriers
With targeted governmental support and supporting actions from the airports, it is possible to reach a goal of 100 per cent biofuels at regional, non-government owned airports in northern Sweden.
The study is commissioned by Trafikverket.
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