Carbon neutral aviation: An innovative government instrument for the market ramp-up of Power-to-Liquid (PtL)
Publication date: 13 February 2023 | Report language: DE
Decarbonizing aviation is an important challenge for the green transformation. Synthetic kerosine is of crucial importance for the decarbonization of the aviation industry. Building on the results of a previous project conducted by the Technopolis Group and Schalast & Partner for the Centre of Competence for Climate, Environment and Noise Protection in Aviation (CENA), the study further develops a Contract for Difference (CfD)-based approach for demand-side funding of Power-to-Liquid (PtL) and examines the framework conditions for the implementation of the model. First, the study provides an overview of the production cost of PtL kerosine and analyses the market for PtL kerosene and green hydrogen. Second, it develops the exact functioning of the CfD-Fund and describes the advantages of the capital market-based funding instrument in terms of state aid law. Third, the structure and management of the fund are explained. Finally, to assess the challenges and opportunities for implementing the funding instrument, the regulatory frameworks in Germany and Europe are examined.