The potential impacts of Emissions Trading Scheme and biofuel options to carbon emissions of U.S. airlines

To reduce carbon emissions, the European Union has implemented the Emissions Trading Scheme (ETS) since 2012 for intra-European commercial flights. In response, airlines have explored various means, including sustainable jet fuels. This article investigates how similar ETS policy would affect domestic carbon emissions when implemented in the United States. The study integrates a model of airlines operations optimization and multi-feedstock biojet fuels life cycle assessment to simulate decisions of biojet fuel and commercial aviation industry responding to an emission policy. We conduct a Monte-Carlo simulation on two scenarios of domestic emission schemes to investigate the adoption of biojet fuels and its impacts on carbon emissions. Our model indicates that implementing an emission policy for U.S. airlines could incentivize adoption of biofuels - a median value of 10% of total fuels in 2050- while only marginally reduce travel demand. Because of a combined effect of emission policy and improved aircraft technology, the emissions in 2050 would only increase 1.37 times the 2005 level despite passenger demand grows by a factor of 2.75. A non-parametric sensitivity analysis suggests that the price of oil, economic growth, and carbon price are the three most significant factors in affecting the fleet-level carbon emissions.