Enabling the aviation CO₂ allowance trading through secure market mechanisms

The growth of world air traffic has been accompanied by a significant increase of its environmental impact, including CO2 emissions, which has forced the European Union to include aviation in its Emission Trading Scheme (EU ETS). The EU ETS is a market-based mechanism that obliges airlines to supply or demand carbon permits, thus forcing them to share confidential information with their competitors in an auction-based market. In this contribution, we propose the use of a Secure Multi-Party Computation framework, which allows airlines to buy and sell emission rights without disclosing confidential information. After introducing the basics of this family of cryptographic techniques, we describe a computational platform for performing secure CO₂ trading, and analyse the expected benefits for the involved stakeholders.