Decarbonizing the aviation sector: Multiplier effects of power-to-liquid fuel production on the German economy

Decarbonizing aviation is crucial for global net-zero efforts, and power-to-liquid (PtL) fuels are a promising pathway. While the techno-economics of PtL fuels have been widely analyzed, there is limited research about the economic and environmental impacts of the fuel infrastructure. This study integrates detailed supply chain analysis with input–output (IO), social accounting matrix (SAM) and financial social accounting matrix (FSAM) multiplier models to assess the broader impacts of PtL fuel production in Germany. Our findings reveal strong interlinkages with domestic industries and considerable multiplier effects. Infrastructure operation has stronger production multipliers, while the construction phase has higher employment multipliers. SAM- and FSAM-based models show amplifying effects of consumption- and investment-induced feedback loops. We further conduct a scenario-based sensitivity analysis to account for uncertainties related to technology cost projections and supply chain design, focusing on electrolyzers, direct air capture plants and different electricity supply options. While relative multipliers are sensitive to changes in supply chain configuration, absolute macroeconomic impacts are also driven by components' cost assumptions. The analysis also highlights environmental trade-offs, particularly in terms of upstream greenhouse gas emissions and water use. Policy implications include fostering local key industries, supporting upstream decarbonization, and accelerating market uptake through targeted financial instruments.