Speaker: Müge Cakan (University of Mannheim); Discussant: Peter Schütz (NHH)
This event is part of a seminar series on Supply Chain Management for faculty members, PhD students and postdocs with a research focus on supply chain management.
About the seminar:
Sustainable aviation fuel (SAF) deployment faces a fundamental tension: cost-advantaged production regions often differ from those with strong decarbonization mandates. Book-and-claim systems decouple environmental attributes from physical fuel flows to alleviate this geographic mismatch; however, their effects on regional supply and global emissions remain contested. We develop a game-theoretic model in which two SAF producers with heterogeneous abatement efficiencies compete to supply a blender facing airlines whose willingness to pay for abatement is subject to mean–variance carbon-valuation uncertainty. Our analysis yields three results. First, relative to book-and-claim, physical transfer preserves spatial cost advantages and can raise local adoption when local producers are viable, but it restricts market participation at low valuation levels. Second, book-and-claim generally expands total SAF adoption by enabling cost-advantaged external producers to enter, at the expense of local supply concentration. Third, when valuation uncertainty is high, physical transfer yields higher total adoption only if the locally cost-advantaged pathway is cheaper and less carbon-efficient, creating a structural tension with decarbonization objectives. Together, these results reveal a core policy trade-off: physical transfer supports regional industrial development through spatial insulation when local supply is viable, while book-and-claim prioritizes aggregate emissions abatement through cross-regional sourcing.
To participate, please follow this link.