Fathom was asked by the European Climate Foundation to consider how various ways of decarbonising aviation can support broader European policy objectives such as boosting economic competitiveness and productivity. To answer the question, we built a model comparing the costs of flying using different types of sustainable aviation fuels (SAFs), e-kerosene and hydrogen-powered zero emission flight (ZEF) with fossil kerosene. Some of the key findings are listed below, while section 7 of the report contains recommendations for businesses and policymakers.

Brian Davidson
Head of Energy & Climate

  • Fathom’s economic modelling, using the newly developed Fathom Aviation Decarbonisation Model (FADM), shows that when scaled up in the long term, flying hydrogen-powered planes is likely to be cheaper than flying planes with sustainable aviation fuel (SAF)
  • The economic spillover benefits of R&D in hydrogen-powered aircraft, including gains in productivity, make this the economically optimal route to net-zero aviation, not just for the sector, but for society as a whole
  • Fathom’s analysis indicates a far greater market opportunity in hydrogen-based fuels than the waste-based biofuels that are the focus of current policy and investments; flying with these biofuels will become more expensive than flying with hydrogen once they reach 15% market penetration due to feedstock constraints, whereas e-kerosene and hydrogen-powered zero emission flight (ZEF) costs will trend downwards thanks to economies of scale and learning by doing
  • This new perspective goes beyond emissions and challenges the prevailing focus on SAF, highlighting the long-term economic potential of zero-emission aircraft as a more viable and beneficial path for Europe’s competitiveness

The charts below show the levelised costs of flying in 2050 in our central scenario. The first shows that ZEF becomes cheaper than other decarbonisation options when more than 35% of European aviation is decarbonised. The second chart indicates that if the economic spillovers from ZEF R&D were subtracted from ticket prices, that flying with ZEF would be cheaper than with fossil kerosene, and all other decarbonisation options, at all levels of decarbonisation.

 

 

Fathom is a world-leading consultancy specialising in the global economy, geopolitics and financial markets. One of our core focuses is climate-related research. We provide clear analysis and advice on the energy transition, and the economics of climate change, to assist policymakers, strategists and investors.

The European Climate Foundation (ECF) is a major philanthropic initiative working to help tackle the climate crisis by fostering the transition to a net-zero emission society at the national, European and global level. It supports over 700 partner organisations to carry out activities that drive urgent and ambitious policy in support of the objectives of the Paris Agreement, contribute to the public debate on climate action and help deliver a socially responsible transition to a net-zero economy and sustainable society in Europe and around the world.