A new report from the India Energy & Climate Center (IECC) suggests India can produce sustainable aviation fuel (SAF) up to 40% cheaper than global benchmarks. Leveraging abundant agricultural residue and low-cost solar-powered green hydrogen, the nation could also curb crop residue burning and create a significant export industry, potentially generating $9 billion annually by 2030.
India possesses a unique advantage in the burgeoning sustainable aviation fuel (SAF) market, with the potential to produce it up to 40% cheaper than global benchmarks. A report by the India Energy & Climate Center (IECC) at UC Berkeley and Energy Innovation highlights the synergy between the nation's vast agricultural residue and low-cost solar-based green hydrogen.
Export Revenue Potential
Global demand for SAF is projected to surge due to airline mandates and climate commitments. The report estimates that capturing a quarter of the global market by 2030 could yield $9 billion in annual export revenue, escalating to $30 billion by 2040. This would necessitate utilizing only a small fraction of India's surplus crop residue.
Addressing Air Pollution
The report proposes a pathway to transform a major environmental challenge – the annual winter burning of crop residue in northern India – into an economic opportunity. This residue, a significant contributor to air pollution, could instead serve as feedstock for a clean aviation fuel industry.
Energy Security and Cost Reduction
The recent geopolitical tensions in West Asia have underscored the volatility of oil prices for energy-importing nations like India. Aviation fuel represents a substantial operating expense for domestic airlines, and domestic SAF production offers a route to greater energy security and price stability.
Power-and-Biomass-to-Liquids (PBtL) Process
The IECC report details a production method known as power-and-biomass-to-liquids (PBtL). This process involves gasifying agricultural waste such as rice straw and cotton stalks, then combining it with green hydrogen produced from solar power. The resulting synthesis gas is converted into liquid fuels, including aviation-grade fuel, using the Fischer-Tropsch process. Critically, this method avoids competing with food crops and does not require additional land or extensive irrigation.
Farmer Benefits and Logistics
Establishing a commercial market for agricultural residue promises additional income for farmers and supports rural logistics businesses. Companies are already developing supply chains for residue aggregation, densification, storage, and transportation, with digital marketplaces emerging to connect farmers with industrial users.
Strategic Deployment
Regions near Delhi, Pune, and Mumbai airports are identified as prime locations for initial PBtL projects. States like Maharashtra, Haryana, Rajasthan, and Uttar Pradesh are favored due to their biomass availability, renewable energy potential, and existing infrastructure.
Challenges and Recommendations
While the core technologies – biomass gasification, Fischer-Tropsch synthesis, and green hydrogen production – are established, integrating them at a commercial scale in India presents the key challenge. The report recommends launching demonstration projects, providing financial support for green hydrogen, streamlining approvals, and encouraging public sector oil companies to act as anchor developers. Aligning Indian SAF standards with international requirements and expanding domestic blending targets are also advised.