Effective policy design for synthetic aviation fuel production in Finland

Abstract

Aviation is a hard-to-abate sector that is set to face increased emissions amounts in the future as global travel increases. Sustainable aviation fuels are one solution for decreasing aviation in-flight emissions. Sustainable aviation fuels include synthetic aviation fuel, also known as electro-sustainable aviation fuel (eSAF), which is produced using hydrogen and captured biogenic carbon dioxide (CO₂). Given the needed feedstocks for synthetic aviation fuel, Finland has a unique opportunity to position itself as a leader in the synthetic aviation fuel production, particularly ample supply of biogenic CO₂. This thesis attempts to uncover the root causes why synthetic aviation fuel production has been slow to take off in Finland and how the situation could be remedied.

A review of existing literature in the field of synthetic aviation fuel and energy transitions is presented. The work then moves on to utilize applied policy research, as its objective is to inform policy development and decision-making related to synthetic aviation fuel production. To arrive at meaningful conclusions, the research involves economic operators throughout synthetic aviation fuel supply chains. Qualitative data were collected through semi-structured interviews and analyzed by categorization into overarching themes. The interviews produced three themes explaining the slow materialization of synthetic aviation fuel projects in Finland: 1) infrastructure; 2) guaranteed revenue; and 3) societal stability. Based on these outcomes, it is recommended that Finland should focus on CO₂ and electricity infrastructure investments, participation in the First Movers’ Coalition double-sided auction, incorporation of synthetic aviation fuel production into resilience strategy, influencing EU politics in maintaining current eSAF policies and creating a lucrative environment for private capital funneling into the Finnish synthetic fuel industry.