Research on Carbon Offset Decision of Airlines under Mandatory Blending Policy of Sustainable Aviation Fuel

DOI

10.2991/978-94-6239-699-9_22How to use a DOI?

Keywords

Sustainable aviation fuel; Mandatory blending policy for sustainable aviation fuels; Carbon offset

Abstract

Against the backdrop of ICAO’s long-term goal of achieving net-zero carbon emissions in international aviation by 2050, mandatory sustainable aviation fuel (SAF) blending policies and carbon trading mechanisms serve as vital tools for airlines’ low-carbon transformation. This paper establishes a duopoly Stackelberg game model consisting of a leader airline and a follower airline with different fuel efficiency levels to analyze their carbon offset decisions under uniform and differentiated SAF blending mandates. It derives equilibrium solutions for optimal capacity, profit and carbon allowance surplus, and investigates the impacts of SAF blending ratios. Empirical results based on the Xuzhou–Guangzhou route operated by China Southern Airlines and Loong Air show that if leader airline mixes higher levels of SAF, their high SAF costs will severely compress profits and suppress capacity investment, while follower airline may seize the market through capacity expansion under high mandatory blending ratio policies, relying on its fuel efficiency advantage. Despite being constrained by high SAF usage costs, its profits are relatively less affected than leaders.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Download article (PDF)

TY  - CONF
AU  - Lei Xu
AU  - Jirao Yu
AU  - Junwei Zhang
PY  - 2026
DA  - 2026/06/02
TI  - Research on Carbon Offset Decision of Airlines under Mandatory Blending Policy of Sustainable Aviation Fuel
BT  - Proceedings of the 2026 4th International Conference on Digital Economy and Management Science (CDEMS 2026)
PB  - Atlantis Press
SP  - 200
EP  - 208
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-699-9_22
DO  - 10.2991/978-94-6239-699-9_22
ID  - Xu2026
ER  -