Institutional Analysis of Direct Air Capture in the context of Aviation Sustainability

Abstract

The aviation industry is one of the most challenging sectors to decarbonise. There is an urgent need to reduce emissions in order to meet its committed goal of achieving net-zero flying by 2050. Along with the existing and proposed decarbonization options such as electric aircraft, hydrogen fuel, and operational
improvements, a hard-to-abate sector like aviation would require large amounts of carbon dioxide removal in order to achieve net zero. One such technology-based carbon removal option is Direct Air Capture (DAC) which has the potential to emerge as a potential game-changer to mitigate aviation’s environmental impact. This thesis report presents an analysis of the suitability of adopting DAC for aviation sustainability, viewed through an institutional analysis lens using the Institutional Analysis and Development (IAD) framework. DAC is framed as a technology niche from the Multi-Level Perspective to get a descriptive understanding of the problem context and the interconnected parts in the larger picture of aviation sustainability innovations. Specific to DAC, multiple dimensions of DAC integration in the aviation sector, including technology, actors, and policy analysis are carried out. Employing the IAD framework, the underlying institutional arrangements, rules, and incentives influencing the adoption of DAC for carbon removal in the aviation industry are examined.

Data was collected from grey literature, industry reports and interviews with aviation industry professionals. To assess the suitability of DAC for aviation sustainability, various evaluative criteria such as carbon emission reduction potential, technological feasibility, cost-effectiveness, and market acceptance
were considered. There are trade-offs in using DAC for aviation such as complexity in carbon markets, uncertainties in carbon credit pricing, and challenges in accurately measuring DAC’s carbon removal effectiveness. It is seen that DAC holds promise as an innovative carbon removal technology with potential applications in aviation including but not limited to the use in sustainable aviation fuel production. The current state of technology is nascent but the proposed policies under the EU have the potential to drive the commercialization of this technology. The aviation industry stakeholders, along
with carbon market operators, DAC providers, and government policymakers, are key actors involved. The incentives and motivations of actors in determining the success and scalability of DAC for aviation are illustrated.

Based on the analysis, the following recommendations are provided. To minimize residual emissions from aviation, several strategic approaches can be undertaken. Firstly, fostering collaborative research and development among airlines, DAC technology providers, and research institutions can be vital to
tackle technological challenges and creating tailored DAC solutions for aviation. Secondly, governments should extend their support through policy incentives and research grants, encouraging DAC development and integration within the aviation industry. Thirdly, establishing robust standards and certification for DAC-derived Sustainable Aviation Fuel ensures the credibility and quality of carbon removal achieved, further supporting aviation sustainability