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Economic and Emissions Impacts of Renewable Fuel Goals for Aviation in the US


  • Winchester, Niven
  • McConnachie, Dominic
  • Wollersheim, Christoph
  • Waitz, Ian A.


The US Federal Aviation Administration (FAA) has a goal that one billion gallons of renewable jet fuel is consumed by the US aviation industry each year from 2018. We examine the economic and emissions impacts of this goal using renewable fuel produced from a Hydroprocessed Esters and Fatty Acids (HEFA) process from renewable oils. Our approach employs an economy-wide model of economic activity and energy systems and a detailed partial equilibrium model of the aviation industry. If soybean oil is used as a feedstock, we find that meeting the aviation biofuel goal in 2020 will require an implicit subsidy from airlines to biofuel producers of $2.69 per gallon of renewable jet fuel. If the aviation goal can be met by fuel from oilseed rotation crops grown on otherwise fallow land, the implicit subsidy is $0.35 per gallon of renewable jet fuel. As commercial aviation biofuel consumption represents less than two per cent of total fuel used by this industry, the goal has a small impact on the average price of jet fuel and carbon dioxide emissions. We also find that, under the pathways we examine, the cost per tonne of CO2 abated due aviation biofuels is between $50 and $400.

Suggested Citation

  • Winchester, Niven & McConnachie, Dominic & Wollersheim, Christoph & Waitz, Ian A., 2013. "Economic and Emissions Impacts of Renewable Fuel Goals for Aviation in the US," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 155003, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:155003
    DOI: 10.22004/ag.econ.155003

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    References listed on IDEAS

    1. Niven Winchester & Christoph Wollersheim & Regina Clewlow & Nicolas C. Jost & Sergey Paltsev & John M. Reilly & Ian A. Waitz, 2013. "The Impact of Climate Policy on US Aviation," Journal of Transport Economics and Policy, University of Bath, vol. 47(1), pages 1-15, January.
    2. Anger, Annela, 2010. "Including aviation in the European emissions trading scheme: Impacts on the industry, CO2 emissions and macroeconomic activity in the EU," Journal of Air Transport Management, Elsevier, vol. 16(2), pages 100-105.
    3. Xavier Gitiaux & Sebastian Rausch & Sergey Paltsev & John M. Reilly, 2012. "Biofuels, Climate Policy, and the European Vehicle Fleet," Journal of Transport Economics and Policy, University of Bath, vol. 46(1), pages 1-23, January.
    4. Malina, Robert & McConnachie, Dominic & Winchester, Niven & Wollersheim, Christoph & Paltsev, Sergey & Waitz, Ian A., 2012. "The impact of the European Union Emissions Trading Scheme on US aviation," Journal of Air Transport Management, Elsevier, vol. 19(C), pages 36-41.
    5. Sgouridis, Sgouris & Bonnefoy, Philippe A. & Hansman, R. John, 2011. "Air transportation in a carbon constrained world: Long-term dynamics of policies and strategies for mitigating the carbon footprint of commercial aviation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1077-1091.
    6. Gurgel Angelo & Reilly John M & Paltsev Sergey, 2007. "Potential Land Use Implications of a Global Biofuels Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-36, December.
    7. Vespermann, Jan & Wald, Andreas, 2011. "Much Ado about Nothing? – An analysis of economic impacts and ecologic effects of the EU-emission trading scheme in the aviation industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1066-1076.
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