India is set to mandate a significant shift towards sustainable aviation fuel (SAF), with a draft policy proposing that airlines begin blending SAF with conventional Aviation Turbine Fuel (ATF) from 2027. The National Policy on Sustainable Aviation Fuels outlines an ambitious target of reaching 40% SAF blending by 2040, starting with a 1% requirement.
Phased Blending Targets and Domestic Production
The proposed mandate will be implemented in two key phases. From 2027 to 2030, the SAF blending requirement will incrementally rise from 1% to 5%. The second phase, spanning 2031 to 2040, will see the target escalate to 40%. A cornerstone of this policy is the exclusive use of indigenously manufactured SAF, coupled with substantial financial and regulatory backing for domestic production facilities.
Ensuring Fuel Sourcing from Indian Airports
To curb the practice of “economic tankering,” where airlines uplift more fuel at departure airports to avoid higher prices at destination, the ministry has proposed a critical measure: Indian and foreign airlines operating international services will be required to source a minimum of 90% of their annual sector aviation fuel from international airports within India. This calculation will be based on the fuel needed for the trip and taxiing, excluding contingency or alternate reserve fuel.
Incentives for SAF Production and Innovation
The draft policy outlines a comprehensive suite of incentives designed to stimulate domestic SAF production. These include various forms of taxation support, such as GST exemptions or reductions, import duty waivers, income-tax holidays, and accelerated depreciation. Furthermore, viability gap funding, green financing instruments, and assistance for refinery retrofitting are proposed. A dedicated SAF Innovation Seed Fund will also be established to support pilot projects, indigenous technology development, feedstock optimization, and incubation for relevant startups.
India's SAF Production Potential
With India’s annual ATF consumption projected to increase from 8.2 million tonnes currently to nearly 14.2 million tonnes by 2030, the potential for SAF production is substantial. Estimates suggest India could produce approximately 10 million tonnes of SAF annually by 2040, though this would necessitate investments ranging from USD 70-85 billion. Viable feedstocks for SAF include surplus agricultural residues, used cooking oil, municipal solid waste, industrial waste streams, and renewable fuels of non-biological origin. SAF is designed as a 'drop-in' fuel, fully compatible with existing ATF infrastructure.
Policy Framework and Digital Registry
To ensure effective implementation, the policy proposes the creation of a comprehensive ecosystem. This includes the establishment of the National Council on Sustainable Aviation Fuel (NC-SAF) as the apex body for coordinated policy execution. Additionally, a SAF Registry, under the Directorate General of Civil Aviation (DGCA), will function as a national digital platform to record, track, and verify all SAF-related transactions, ensuring transparency and interoperability with carbon markets.