Whalesbook
India Targets Global SAF Market with Ethanol
India's commitment to decarbonizing its aviation sector is gaining momentum with formal regulations for blending sustainable aviation fuel (SAF) into jet fuel. This move is a strategic play to use its biofuel expertise and abundant feedstock potential to capture a significant global market share in SAF production. The nation has set targets: starting with a 1% SAF blend for international flights by 2027, rising to 2% by 2028, and 5% by 2030, in line with the International Civil Aviation Organization's (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
Addressing SAF Costs and Building Supply Chains
Rohit Kumar of the Sustainable Aviation Fuel Association India stressed the need for incentives for airlines to manage initial SAF adoption. Currently, SAF costs two to five times more than conventional jet fuel (ATF), depending on the production pathway. While the initial 1% blending target is unlikely to significantly affect airfares, financial support is crucial for a smooth launch for the industry. India's success with over 20% ethanol blending in petrol, achieved ahead of schedule, provides a strong basis for a similar SAF ecosystem. This includes leveraging existing infrastructure and policy learnings to speed up development of a domestic SAF supply chain, vital for meeting demand and future export opportunities.
India's Strengths: Feedstock and Refining
India possesses significant advantages in feedstock availability, with over 750 million tonnes of biomass and farm waste. This, coupled with a strong refining industry, notably Indian Oil Corporation (IOCL), which is investing in SAF production at its Panipat refinery, using HEFA and alcohol-to-jet (ATJ) technologies, favors the country. IOCL has achieved ISCC CORSIA certification for SAF production from used cooking oil (UCO), with a target of 35,000 tonnes annually by December 2025. Global SAF production is projected to reach only 2.4 million metric tons in 2026, slowing due to high costs and policy challenges. India's ambition goes beyond domestic use, with estimates suggesting it could produce 5-6% of global SAF, potentially becoming a leading exporter.
Challenges: Competition, Costs, and Hurdles
Despite its potential, India's path to becoming a SAF leader faces challenges. The global SAF market already has established players and different policy approaches. The European Union mandates 2% SAF by 2025 (rising to 70% by 2050), while the US uses incentives like the Renewable Fuel Standard. These regions offer benchmarks but also pose significant competition. A study found only 24% of announced SAF capacity was operational by late 2024, with over 40% of planned capacity at risk. A key concern is the 'chicken-and-egg' issue: higher production needs assured demand and long-term contracts for funding, but current limited supply and high costs impede this. Past consumer concerns over ethanol blending in petrol, due to perceived mileage loss and lack of transparency, highlight the need for clear communication and trust in any large fuel transition. Biodiesel from used cooking oil (UCO) in India has struggled due to feedstock aggregation issues, missing blending targets. This shows the complexity of scaling SAF production, which currently costs two to three times more than conventional jet fuel and is forecast to stay that way until 2030.
Outlook: Policy to Drive Growth and Global Reach
The regulatory framework is expected to provide clarity and spur investment across the SAF value chain. Experts believe this will boost aviation's energy transition, especially as geopolitical shifts drive energy security concerns. India's success with ethanol blending and its abundant biomass are key assets. The nation aims to meet domestic demand and become a significant potential SAF exporter. SAF Association India works with global bodies to shape policy and foster development, positioning India to harness its potential and become a substantial global SAF player, if cost competitiveness and scalable production challenges are met.