JRP - Hydrogen in sustainable aviation: Macroeconomic impacts and state intervention

JRP – Hydrogen in sustainable aviation: Macroeconomic impacts and state intervention

JRP_H2_front — Project leader Dr. Steven Gronau and his team are investigating the economic perspective of sustainable aviation

Motivation

Germany needs alternatives to fossil fuels to realize the energy transition and climate targets 2050. Hydrogen (H2), especially its “green” production based on renewables, represents a promising pathway. The momentum of a hydrogen economy affects the aviation sector. H2 as a fuel does not contain carbon; i.e., its combustion does not cause CO2 emissions. Hydrogen-powered aviation is thus an option to decarbonize the sector and reduce its climate impact.
Along with technical feasibility analyses, an assessment of macroeconomic implications is essential to evaluate the potential of hydrogen in aviation. The introduction of H2 implies extensive economy-wide sectoral linkages and involves market actors along the entire value chain from generation to utilization. In addition, supportive policy frameworks are needed, as H2 in end-use applications currently has a higher price than conventional jet fuel.

Objective of the project

The overall objective of the project is a macroeconomic assessment of the hydrogen transition in Germany and its impacts on aviation. A particular focus is on a detailed breakdown of the energy and aviation sectors and the respective H2 value chain. The project addresses two research questions: (1) What are the macroeconomic impacts of hydrogen-powered aviation compared to continuing conventional air transport? (2) What are the effects of state interventions on the hydrogen market?
To answer these questions, the team aims to design a macroeconomic simulation model. The so-called computable general equilibrium model represents the German economy and primarily bases on data from the German Federal Statistical Office (Input-Output-Calculations, Trade Balances, etc.).

After conceptual model design, the project simulates future energy scenarios and investigates state interventions. As a result, the project examines changes in key macroeconomic indicators as well as sector-specific economic activities (e.g., GDP, Hydrogen-Kerosene-Substitutions, H2-Imports). The analysis benefits from the interdisciplinarity of the SE²A cluster.