Laedon (Ray) Kang | UC Davis

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Presentation Description

Aviation and Marine transport are small but critical elements of the global transportation ecosystem. This study compares policies in the US and EU for reducing GHG emissions in marine and aviation applications by supporting the deployment of alternative fuels. In the United States, two policies, the Renewable Fuel Standard (RFS) and Inflation Reduction Act (IRA), provide a foundation for alternative fuel deployment in these sectors. The EU has an extensive legislative package. These backbone policies in two nations combined with carbon credit trading systems, ETS in the EU and LCFS & Cap, and trade in CA. This article compares each jurisdiction's policy strategies (i.e., aims, enforcement type, and policy level). As CA provides additional benefits to the federal policies, CA would represent the highest level of US clean fuel policies. To quantitatively compare the policy influence, this paper estimates fourteen different clean energies in three categories (i.e., biofuel, hydrogen, and E-fuels) are compared under each jurisdiction's policy schemes. In phase I, we estimate production costs through subsidies, penalties, and carbon trading prices in the CA, and EU. In phase II, we predicted input parameters of Total Actual Cost (TAC) using VAR with macroeconomic variables (i.e., CPI and NG) and implemented a Monte Carlo simulation. In phase III, each region's marginal abatement cost (MAC) is compared in maritime and aviation. The result in phase I shows that the price of clean fuel in CA is lower than in the EU, but the cost of penalized fossil fuel in the EU in maritime is 78.5 $/GJ, while it is only 45 $/GJ in CA. The predicted distribution of TAC in phase II reveals that clean fuels would be more competitive in the future with continued policy. In phase III, the projected MAC suggests that a combination of sources would be used for both aviation and maritime. In all phases, the EU has higher costs than CA, and the aviation sector has continuously higher costs than the maritime sector. In the future, hydrogen and biochemical biofuels tend to have lower abatement costs compared to other alternative fuels.

Speaker Biography

Laedon (Ray) Kang is a MS student studying Transportation Technology and Policy at the University of California at Davis. He currently works at the Policy Institute for Energy, Environment, and the Economy labs on projects related to clean fuel policy, sustainable aviation fuel policy, and RNG policy based on LCA. His research interests include sustainable fuel policies like LCFS and policy-based competitiveness of clean fuels. He previously worked as a senior manager of environmental facilities at Incheon Airport Corporation and as an energy policy analyst at Kore Energy Agency. He holds a B.S. in Mechanical Engineering from Chung-Ang University in South Korea and an M.B.A. in UIUC. Additionally, he is a holds Financial Risk Manager (FRM), Project Management Professional (PMP), and Charted financial Analyst level 1.

Co-presenters

Alan Jenn
University of California-Davis

Murphy Colin
University of California-Davis

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