(15 pages) CAEP.8.WP.015.2.en.doc 

## COMMITTEE ON AVIATION ENVIRO NMENTAL PROTECTION (CAEP)

EIGHTH MEETING
Montréal, 1 to 12 February 2010

Agenda Item 2: Review of technical proposals relating to aircraft engine emissions

ENVIRONMENTAL AND ECONOMIC ASSESSMENT OF THE NO X 

### STRINGENCY SCENARIOS

(Presented by Rapporteurs of MODTF and FESG)

SUMMARY This paper presents an overview of th e analysis conducted by MODTF and FESG of the cost impacts, emissions re ductions and environmental trade-offs of the NOx stringency scenarios under consideration for CAEP/8 1



### . Action by CAEP is in paragraph 7.

1. INTRODUCTION

1.1 This paper presents an overview of the assessment of the environmental benefits and economic costs of stringency scenarios to reduce emissions of nitrogen oxides (NOx) relative to the ICAO CAEP/6 standard. It briefly discusses the models, databa ses, methods and assumptions used by MODTF and FESG to conduct the environmenta l benefit and economic cost asse ssments. The emissions reduction results from the MODTF assessment and the FESG assessment of the co st impact are presented along with a discussion on environmental trade-offs. Finally the cost-effectiveness resu lts are determined and presented as costs per tonne of NOx reduction during the ICAO Landing Take Off (LTO) cycle, including the ranking of the stringency scenarios. Results are re ported separately for the small engine group (thrust rating of 26.7<Foo< 89kN) 2 

### , large engine group and combined groups. The main conclusions of the analysis are reported in Appendix A. All tables and graphics are provided in Appendix B.

1 Detailed descriptions of the NOx stringency assessment process, assumptions, and results are provided in [CAEP/8-IP/13] “NOx Stringency” and [CAEP/8-IP/14] “Economic Assessment of the NOx Stringency Scenarios”. 2 Foo – Thrust rating. Thrust is expressed in kilonewtons (kN). 

### International Civil Aviation Organization



### WORKING PAPER CAEP/8-WP/15 2/12/09

### CAEP/8-WP/15 - 2 -

2. BACKGROUND

2.1 As part of the NOx stringency assessment frame work, WG3 provided 10 scenarios for modelling, as shown in Table 1. For the large engine category, the CAEP Steering Group in 2007 agreed to analysis of 5%, 10% and 15% stringency with a slope of 2.0 above 30 OPR 3 

### , and 10%, 15% and 20% stringency at a slope of 2.2. A corresponding selection of small en gine stringencies was agre ed for each scenario. The 10 stringency scenarios were analyzed for each of 3 future years, 2016, 2026 and 2036. The assessment framework also called for two stringency introduc tion dates, 31 December 2012 and 31 December 2016.

2.2 A Modification Status (MS) methodology was developed by WG3 for assessing engine technology responses to the CAEP/8 NOx stringency scenar ios. It includes Minor Changes (MS1), Scaled Proven Technology (MS2) and New Technology (MS3).

2.3 The MS methodology covers the situation where an engine family fails to comply with a NOx stringency scenario and proposes the different categori es of response that may be used to bring into compliance any in-production engine family failin g a new proposed CAEP/8 NOx stringency standard. Only MS1 and MS2 technology responses were needed by the engines in the small engine group to allow them to comply with the NOx stri ngency scenarios, whereas, for the large engine group at the higher stringency scenarios, all three MS technology resp onses (MS1, MS2 and MS3) were required to make these engines comply with the stringency scen arios as can be observed in Figure 1.

2.4 For each stringency scenario outlined in Table 1, MODTF conducted NOx modelling separately in the terminal area below 3,000 ft and above 3,0 00 ft. In addition to modelling NOx, the environmental trade-offs associated with the proposed stringencies were also modelled. These included fuel burn tradeoffs below and above 3,000 ft (taking into account a possible fuel burn penalty, as per recommendations from WG3), as well as the associated noise trade-offs (taking into account a possible noise penalty, as per recommendations from WG1). The NOx, fuel burn and noise results presented herein represent the consensus view of MODTF and are consistent across multiple models 4 

### . The analysis was conducted for all affected engines as well as separately for the large and small engine groups.

2.5 Costs assessed by FESG included non-recurring co sts incurred by manufacturers and recurring costs incurred by manufacturers and airlines. FESG in corporated a cost-effectiv eness approach where cost impacts incurred by manufacturers and operators were compared with the change in the NOx emissions. This allows scenarios to be ranked based on to tal industry cost per tonne of NOx reduced.

2.6 A listing of assumptions used for the CAEP/8 NOx stringency cost-effectiveness analysis is included in CAEP/8-IP/14. A thirty year time horiz on through 2036 was used to calculate and assess the Net Present Value (NPV) of the industry costs and aggregate NOx emissions reductions. The aggregate NOx emissions reductions were computed by FESG using the modelled results from 2006, 2016, 2026 and 2036 assuming linear interpolation between the modelled years.

3. EMISSIONS REDUCTIONS RESULTS

3.1 Figures 2 through 9 provide MODTF consensus results for NOx modelling below and above 3,000 ft. Results are presented in terms of metric tonnes and percenta ge NOx reduced for each stringency scenario listed in Table 1, relative to the baseline no stringency case. Solid bars show reduction results for

3 OPR – Overall Engine Pressure Ratio. 4 Individual model results are provided in [CAEP/8-IP/13]

.

### CAEP/8-WP/15 - 3 -

a NOx stringency implementation date of 31 Decemb er 2016, and hashed bars show additional NOx reduction for an earlier implementa tion date of 31 December 2012.

3.2 It should be noted that the quoted absolute va lues of NOx savings are sensitive to the modelling assumptions. The primary function of the data is to allow comparison between the various scenarios and implementation dates. A detailed listing of the MODTF assumptions is provided in CAEP/8-IP/13.

3.3 Figures 2 through 5 provide the NOx reduced for all engines, large engines, and small engines for the below 3,000 ft case (presented separately in terms of metric tonnes, and all engines percentage NOx reduced). These results are calcula ted based on the MODTF Local Air Quality (LAQ) consensus model computed using ICAO default times-in-mode. The to tal NOx reduced below 3,000 ft ranges from about 6,300 metric tonnes to over 114,000 metric tonnes for all engines, or from 1.4% to 9.8% below the baseline no stringency case. As can be seen, the total sa vings for the large engines are about two orders of magnitude higher than for the small engines. Another way of looking at this is that the large engines account for about 99 percent of the total NOx savings across all scenarios.

3.4 Figures 6 and 7 provide the NOx reduced for all en gines for the above 3,000 ft case. These are MODTF consensus results from AEDT 5 

### . The total NOx reduced above 3,000 ft ranges from about 54,000 to over 773,000 metric tonnes for all engines, or fro m 1.5% to 10.1% below the baseline no stringency case – about the same percentage as described in Paragraph 3.3 for the below 3,000 ft case.

4. COST RESULTS

4.1 Cost impacts were estimated for each stringe ncy scenario listed in Table 1 for the two implementation dates for small and large engine categories separately , with a range of values for a number of key assumptions, including non-recurring costs, fuel burn penalty, fuel price, loss of resale value (LRV) and a variety of discount rates. As summar ized in Table 2, total cost impacts for small and large engines combined are broadly similar for st ringency scenarios 1 through 5, but for scenarios 6 through 10 costs increase steeply, driven by non-r ecurring costs for engines driven by MS3 technology response. While efforts were made to comprehensivel y quantify all cost impacts, some costs were not included. For example, increased industry operational costs in scenarios involving higher fuel burn were partially itemized to include fuel costs and costs as sociated with loss in payload for payload limited flights. However, carbon costs for additional CO 2 

### emissions such as those resulting from the inclusion of airlines in the EU Emissions Trading Scheme were not itemized and consequently were not included in the cost roll-up, but its effects could be assumed to be approximated by the sensitivity cases for the fuel prices discussed in CAEP/8-IP/14.

5. ENVIRONMENTAL TRADE-OFFS

5.1 An important part of the NOx stringency assessmentis the consideration of environmental tradeoffs between the various NOx stringency scenarios, fuel burn, and noise. WG3 recommended a fuel burn penalty range of between 0% and 0. 5% for engine families requiring a major (MS3) modification. Figures 8 and 9 provide the maximum potential fuel burn penalty for the full-flight case, presented in terms of total fuel and percent, respectively. These are M ODTF consensus results from AEDT. In accordance with WG3 recommendations, the MS3 fuel burn penalty only applies to larg e engines and only for scenarios 6 through 10. As can be seen in Figures 8 and 9, the maximum potential fuel burn penalty ranges from about 28,000 metric tonnes to 1.1 Mt (1.1 x 10 6 

### metric tonnes), or from 0.01% to 0.19% relative to the

5 AEDT – Aviation Envi ronmental Design Tool.

### CAEP/8-WP/15 - 4 -

baseline no stringency case. This translated into additional CO 2 

### emissions of between 88,000 metric tonnes and 3.5 Mt. In accordance with WG3 recommenda tions the minimum fuel burn penalty is zero.

5.2 WG1 recommended a noise penalty ra nge of between 0 decibel (dB) and 0.5 dB per certification point for 10% of engines requiring a major (MS3) modification, i.e. 10% of all engines. As with fuel burn, the MS3 noise penalty only applies to large e ngines and only for scenarios 6 through 10. The effect of the MS3 noise penalty on the 55, 60 and 65 DNL 6 

### contour area expressed as a percentage change was less than 0.12%. Based on these findings, MODTF conc luded that the analysis indicates there is no noise trade-off associated with any of the CAEP/8 NOx stringency scenarios. This conclusion has been verified at the global, regional and airport levels.

6. COST-EFFECTIVENESS RESULTS

6.1 The cost-effectiveness results are dominated by large engines, which account for approximately 99% of the benefits. Scenarios 1 through 5 are the most cost effective, all providing relatively low cost per tonne of NOx reduced. For scenarios 6 and 7, cost per tonne of NOx reduced increased by a factor of 3 to 4, using a 3% discount rate. Scenarios 8, 9 a nd 10 result in a further doubling of cost per tonne of NOx reduced. Cost-effectiveness rankings for large and small engines are shown in Tables 3 and 4 respectively. Although the analysis concentrates on NOx reduction up to 3,000 ft, stringencies also have an effect on climb/cruise NOx emissions. If these we re taken into account, the total reduction achieved would increase by an approximate factor of 7 to 8, and the costs per tonne would diminish accordingly 7



### .

6.2 The early implementation date of 2012 gives overa ll lower values for the costs per tonne of NOx reduced. This is enabled by an extra four years of NOx reduction compared to 2016 implementation, coupled with roughly the same costs for both im plementation dates. This implies that an early implementation year would be more cost effective. Ho wever, in the approach used, it is assumed that the non-recurring costs for the technology responses needed start four years in advance of implementation (from 2009). This may mean that in practice a so mewhat later date than 2012 is more obvious, particularly for those scenarios involving MS3 modifications. The CAEP/6 decision made in 2004 with an implementation date of 2008 woul d be consistent with a CAEP/8 implementation date of 2014.

6.3 The example in Figure 10 includes large engine results for both 2012 and 2016 implementation dates. Gold columns represent cost uncertainty bands for the 10 stringency scenarios based on a 2016 implementation date; whereas, the red columns repre sent the uncertainty bands for a 2012 implementation date. The “fan lines” indicate lines of constant cost per tonne of NOx reduction. From analysis of Figures 10 and 11, two conclusions emerge: (1) The small engines contribute approximately 1% of the aggregate NOx reduction benefit. Additionally, while the total co sts to make small engines compliant are low, their cost-effectiveness is worse, by a factor ranging fro m 30% to as high as 200%. (2) The discount rate does not affect the ranking of NOx stringency scenarios, but higher discount rates give lower present value to the NOx reduction in the future years. 8 

### Similarly none of the other sensitivity tests performed influence the ranking of scenarios.

7. ACTION BY THE CAEP

7.1 The CAEP is invited to:

6 DNL – Day-Night Noise Level. 7 For more details, refer to [CAEP/8-IP/14]

. 8 For details on the effect of discount rates on the results refer to [CAEP/8-IP/14].

### CAEP/8-WP/15 - 5 -

a) take note of the material presented in this paper;

b) accept the results of the NOx stringenc y assessment performed jointly by MODTF and FESG; and

c) consider the results of the assessment performed jointly by FESG and MODTF in the NOx stringency discussions.

— — — — — — — —

### CAEP/8-WP/15 Appendix A English only



### APPENDIX A

SUMMARY AND MAIN CONCLUSIONS

CAEP has tasked FESG and MODTF to study the ef fects of a number of NOx stringency scenarios 9,10 

### . In this regard MODTF, with substantial input from the other CAEP working groups, studied the consequences of defined stringency scenarios on the LTO 11 

### -NOx emissions, climb and cruise NOx emissions, and the associated noise, fuel use and CO 2 

### emissions. FESG assessed the cost impacts of the NOx stringency scenarios, and brought the results toge ther with the analysis of emissions reductions undertaken by MODTF modellers to present cost-eff ectiveness results. This paper presents an overview of the analysis of cost impacts, emissions reductions and environmental trade-offs of the NOx stringency scenarios together with the resulting cost-effectiveness findings, with co st per tonne of NOx reduced and rankings presented for each stringency scenario. Deta iled descriptions of the NOx stringency assessment process, assumptions, and results are provided in CAEP/8-IP/13 and IP/14 12



### .

The main conclusions are:

a) the large engines dominate the NOx reductions;

b) combined cost-effectiveness results fall into three general groupings as follows:

1) cost per tonne NOx reduced is lowest for stringency scenarios 1-5,

2) increases by a factor of 3-4 for scenarios 6-7, and

3) further doubles for scenarios 8-10.

— — — — — — — —

9 Ref

. [CAEP-SG/20071-SD/5] . “Summary of Discussions and Decisions of th e Fifth Meeting of the Steering Group Meeting. Friday, 30 November 2007”. First Steering Group meeting of th e CAEP/8 cycle held in Zurich (Switzerland) on November 26-30, 2007. Appendix E . Modelling and Databases – MODTF, p. 19. Task MOD.06. Conduct policy option analyses as requested by CAEP. This effort requires coordinating work including a specific framework and set of assumptions requi red to support CAEP/8 analyses (WG1/2/3/FESG). Appendix F . Forecast and Economic Analysis – FESG, p.22. Task F.07. Perform a cost-effectiven ess analysis of potential NO X stringency options.

10 More details on the work programmes of MODTF and FESG for CAEP/8 are provided in [CAEP/8-WP/05] “MODTF Work Programme Overview” and [CAEP/8-WP/04] “Report of the FESG”. 11 LTO – Landing and take-off. 12 Ref

. [CAEP/8-IP/13] “NOx Stringency” and [CAEP/8-IP/14] “Economic Assessment of the NOx Stringency Scenarios”.

### CAEP/8-WP/15 Appendix B English only



### APPENDIX B

NO X 

### STRINGENCY ASSESSMENT RESULTS TABLES AND GRAPHICS

Table 1. NOx Stringency Scenarios
NOx Stringency Scenario Small Engines Large Engines [26.7 kN / 89 kN Foo] 13

, 14 OPR 15 >30 Slope 16
1 -5% / -5% -5% 2 2 -10% / -10% -10% 2.2 3 -10% / -10% -10% 2 4 -5% / -15% -15% 2.2 5 -15% / -15% -15% 2.2 6 -5% / -15% -15% 2 7 -15% / -15% -15% 2 8 -10% / -20% -20% 2.2 9 -15% / -20% -20% 2.2 10 -20% / -20% -20% 2.2



### Table 2 - Cost Results
NOx Stringency Scenarios Low Cost Estimate ($M) 3% discount, 2016, LRV 17 High Cost Estimate ($M) 3% discount, 2016, LRV 1 - 5 $ 1,922 $ 2,500 6 - 7 $ 6,412 $ 9,470 8 - 10 $ 10,878 $ 21,507



### Table 3 – Cost-Effectiveness Ranking, Large Engines
Ranking Stringency Reference NOx Reduction % / Slope of Dp/Foo 1 NS01, NS02, NS03, NS04, NS05 -5% / 2.0, -10% / 2.2, -10% / 2.0, -15% / 2.2 2 NS06, NS07 -15% / 2.0 3 NS08, NS09, NS10 -20% / 2.2

13 Foo – Thrust rating. For engine em issions purposes, the maximum power/thrust available for takeoff under normal operating conditions at ISA (International Standard Atmosphere) sea level static conditions without the use of water injection as approved by the certificating authority. Th rust is expressed in kilonewtons (kN). 14 Incremental stringency options defined for small engines with thrust ratings (F oo) comprised between 26.7 kN and 89 kN. 15 OPR – Overall Engine Pressure Ratio. The engine pressure ratio is defined as the ra tio of the mean total pressure at the last compressor discharge plane of the compressor to the mean total pressure at the compressor entry plane, when the engine is developing its takeoff thrust rating (i n ISA sea-level static conditions). 16 Slope of the line of the NOx stringency options at engine pressure ratio (PR) greater than 30. 17 LRV – Loss in Resale Value.

### CAEP/8-WP/15 Appendix B 

### B-2

Table 4 – Cost-Effectiveness Ranking, Small Engines
Ranking Stringency Reference NOx Reduction % 1 NS01, NS04, NS06 -5% / -5%, -5% / -15% 2 NS08 -10% / -20% 3 NS02, NS03 -10% / -10% 4 NS10 -20% / -20% 5 NS09 -15% / -20% 6 NS05, NS07 -15% / -15%



### Figure 1 - Number of Engine Families Requiring an MS Technology Response

0 2 4 6 8 10 12

1 2 3 4 5 6 7 8 9 10 NOx Stringency OptionNumber of Engine Families MS3 MS2 MS1 Large Engines

0 2 4 6 8 10 12

1 2 3 4 5 6 7 8 9 10 NOx Stringency OptionNumber of Engine Families MS2 MS1 Small Engines

0 2 4 6 8 10 12

1 2 3 4 5 6 7 8 9 10 NOx Stringency OptionNumber of Engine Families MS3 MS2 MS1 Large Engines

0 2 4 6 8 10 12

1 2 3 4 5 6 7 8 9 10 NOx Stringency OptionNumber of Engine Families MS2 MS1 Small Engines



### Figure 2 - Total Below 3,000 ft. NOx Reduced Relative to Baseline All Engines

### B-3 CAEP/8-WP/15 Appendix B


### Figure 3 - Percentage of Below 3,000 ft. NOx Reduced Relative to Baseline All Engines

Figure 4 - Total Below 3,000 ft. NOx Reduced Relative to Baseline Large Engines

### CAEP/8-WP/15 Appendix B 

### B-4

Figure 5 - Total Below 3,000 ft. NOx Reduced Relative to Baseline Small Engines

Figure 6 - Total Above 3,000 ft. NOx Reduced Relative to Baseline All Engines

### B-5 CAEP/8-WP/15 Appendix B


### Figure 7 - Percentage of Above 3,000 ft. NOx Reduced Relative to Baseline All Engines

Figure 8 - Maximum Potential Full Flight Fuel Burn Penalty Relative to Baseline All Engines

### CAEP/8-WP/15 Appendix B 

### B-6

Figure 9 - Percentage of Maximum Potential Full Flight Fuel Burn Penalty Relative to Baseline All Engines

Figure 10 - NOx Cost-Effectiveness – Large Engines

$- $5,000 $10,000 $15,000 $20,000 $25,000

0.0 0.2 0.4 0.6 0.8 1.0 $ 2 0,

00

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$ 3 5

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$ 4 0

, 0 0 0 / t o n n e

*Assumes loss in resale value 

## LTO NOx Reduction (Million Tonnes, 2009 – 2036)Industry Cost*($ Million, 2009 – 2036) $ 4 5

, 0 0 0 / t o n n e

$ 5 0

, 0 0 0 / t o n n e

$ 5 5

, 0 0 0 / t o n n e

$ 6 0

, 0 0 0 / t o n n e 

## Large Engines

• 3% discount rate • Low/high cost range 

## Large Engines

• 3% discount rate • Low/high cost range

NS 6-7 NS 8-10

NS 1-5 

### 2016 2012

### B-7 CAEP/8-WP/15 Appendix B



### Figure 11 - NOx Cost-Effectiveness – Small Engines

$- $100 $200 $300 $400 $500

0 2000 4000 6000 8000 10000 $ 4 0 ,

0 0 0 / t o n n e

$ 3 0 ,

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$ 2 0 ,

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$ 7 0

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$ 8 0

, 0 0 0 / t o n n e

*Assumes loss in resale value 

### LTO NOx Reduction (Tonnes, 2009 – 2036)Industry Cost*($ Million, 2009 – 2036) 

### Small Engines
• 3% discount rate • 2016 stringency effectivity • Low/high cost range 

### Small Engines

• 3% discount rate • 2016 stringency effectivity • Low/high cost range

NS 2,3 NS 9

NS 1,4,6 NS 8 NS 10

NS 5,7



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