Whalesbook
India is positioning itself to become a significant global player in the burgeoning Sustainable Aviation Fuel (SAF) market, driven by ambitious government targets and the nation's substantial ethanol reserves. The recent announcement of indicative blending targets for SAF in Aviation Turbine Fuel (ATF) for international flights, starting in 2027, has energized the domestic bio-fuel industry.
Ambitious Blending Goals
The government has set a clear roadmap, mandating SAF blending targets of 1% for 2027, 2% for 2028, and escalating to 5% by 2030. This strategic move aligns India with international decarbonization efforts in aviation and presents a considerable economic opportunity.
The Ethanol-to-Jet Advantage
Industry optimism is largely fueled by the prospect of utilizing the Alcohol-to-Jet (ATJ) process, identified by the International Civil Aviation Organisation (ICAO) SAF Report as India's largest opportunity. While ATJ is a relatively new technology, with the first plant recently operational in the U.S., Indian bio-energy companies are eyeing the potential to build substantial capacities. Estimates suggest India could produce 125 to 150 crore liters of sugarcane-driven SAF annually by 2030 without disrupting existing ethanol demand for petrol blending. This production volume aligns with potential global demand generated by CORSIA blending targets and the export market, which could reach 150 crore liters by 2030.
Sameer Sinha, CEO of Sugar Business at Triveni Engineering and Industries Ltd., highlights India's competitive edge. He points to the country's surplus ethanol, readily available feedstock, and crucially, lower carbon intensity of Indian ethanol compared to that from countries like Brazil. This makes Indian SAF a cleaner option, positioning the nation as a potential export hub, serving aviation centers such as Singapore and Dubai.
Policy Support Crucial for Growth
However, the development of ethanol-based SAF manufacturing facilities is not an immediate prospect. Experts note that establishing a greenfield facility takes at least three and a half years. Production is expected to ramp up significantly only as India's domestic SAF blending targets approach the 5% mark, driving volume demand. Industry bodies emphasize the critical role of government policy in attracting investment. Assurances of 100% off-take in initial years and an administered pricing structure, similar to the successful ethanol-for-petrol blending program, are considered vital. Hopes are high that a supportive policy framework will be introduced before the close of the current financial year.
It is important to note that the initial SAF blending targets for 2027 are expected to be met primarily through Used Cooking Oil (UCO). Indian Oil Corporation Limited (IOCL) has already made strides, achieving ISCC CORSIA certification for SAF production at its Panipat Refinery and signing an MoU with Air India for supply. The large-scale adoption of alcohol-based SAF is anticipated to follow, aligning with the demand surge expected around 2030.