1. Introduction

The aviation sector relies heavily on conventional fossil-based jet fuels which have significant emissions, particularly in the form of greenhouse gases (“GHG”). Unlike other transportation sectors which have many alternatives available such as electric vehicles, compressed biogas and natural gas etc., the aviation sector has limited options for its decarbonization, majority of which are dependent on sustainable aviation fuel (“SAF”). Air traffic emissions at cruising altitudes generate condensation trails (“contrails”) that impact the atmosphere.^[1] These induced clouds retain heat in the upper atmosphere by absorbing longwave radiation emitted from the Earth’s surface. In contrast to naturally occurring low-level clouds, which tend to reflect incoming solar radiation and produce a cooling effect, contrail-related clouds generally create a net warming influence. Scholarly analyses indicate that the resultant radiative forcing from contrail-induced cloud cover may, in certain circumstances, exceed the warming effect attributable to the aircrafts’ carbon dioxide emissions, thereby materially contributing to climate change.

At the 26^th (twenty-sixth) session of the Conference of Parties held in Glasgow, United Kingdom, India announced its climate action plan, achievement of target of net-zero emissions by 2070. While the Paris Agreement does not specifically set out any sector-specific goals to combat  climate change, the aviation sector’s collective target of achieving net-zero carbon emissions by 2050 aligns (as set out below) with the temperature goal of keeping the temperature rise to below 1.5^◦C above pre-industrial levels, set out under the Paris Agreement.

SAF Blending Targets – India

In this context, in 2022, the 41^st (forty-first) International Civil Aviation Organization (“ICAO”) assembly adopted a long-term global aspirational goal for international civil aviation, collectively targeting net-zero carbon emissions by 2050. With the adoption of the ICAO Global Framework for Sustainable Aviation Fuels, Lower Carbon Aviation Fuels and other Aviation Cleaner Energies at the Third ICAO Conference on Aviation Alternative Fuels (CAAF/3) in November 2023, ICAO and its member states have agreed to endeavor to achieve a collective goal to reduce carbon dioxide emissions in international aviation by 5% (five per cent) by 2030 through use of SAF lower carbon aviation fuels and other cleaner aviation fuels.

India, being a council member state of the ICAO, plans to blend 5% (five per cent) SAF in aviation fuel by 2030, with 1% (one per cent) blending by 2027 and 2% (two per cent) by 2028 as intermediate targets for international flights^[2]. However, the Government of India has not yet notified SAF blending targets for domestic flights, however, according to a report by Deloitte, and Indian Sugar and Bio-Energy Manufacturers Association, the Government of India is considering imposition of SAF blending target of 5% (five per cent) by 2030 and 15% (fifteen per cent) by 2040 for domestic flights.

SAF Blending Targets – Other Countries

Several countries, other than India, have also set ambitious goals for blending of SAF.^[3] For instance, the European Union (“EU”) has adopted the ReFuelEU Aviation Regulation in October 2023 which sets out that the minimum share of SAF supplied at each EU airport should be 2% (two per cent) in 2025 and with gradual increase to 70% (seventy per cent) in 2050. Similarly, the United Kingdom has created a SAF mandate which provides that from 2025, fuel suppliers are required to use a minimum proportion of SAF in the United Kingdom’s aviation fuel mix, gradually rising from 2% (two per cent) in 2025 to 10% (ten per cent) in 2030 and 22% (twenty-two per cent) in 2040. In contrast to the EU and United Kingdom’s demand-side policy approach, the United States of America has taken a supply-side approach to policy, with no obligatory blending mandate, but various incentives being made available. SAF can earn incentives under the Renewable Fuel Standard in the form of renewable identification numbers (“RIN”), which can be bought and sold in a RIN credit market.

Japan has set mandate of 10% (ten per cent) of SAF by 2030, Singapore and Thailand plan for around 3% (three per cent) to 5% (five per cent) SAF blending by 2030, with initial mandates starting at 1% (one per cent) in 2026 for both the countries. While, Australia does not have a specific national SAF target,  it aims to produce 10 (ten) million liters by 2025 through biofuel blending mandates. Similarly, South Korea plans for a mandate of blending of 1% (one per cent) SAF for all international flights from 2027. China, as the largest exporter of used cooking oil, plans to shift gear and become a leader in SAF production. China’s SAF targets include consuming 50,000 (fifty thousand) tons by 2025, a goal to produce 10 (ten) million tons annually by 2030, and implementing a 15% (fifteen per cent) blended SAF mandate by 2030

SAF is emerging as a vital instrument in the transition towards aviation industry’s journey towards carbon-neutrality. Blending SAF with aviation turbine fuel has the potential to reduce GHG emissions by up to 80% (eighty per cent) as compared to traditional jet fuel. The growing emphasis on adoption of SAF proves that it is now a matter of regulatory and legal necessity within India’s broader climate and energy policy framework.

2. How Is SAF Produced?

SAF can be produced using a variety of feedstock. Under the Carbon Offsetting and Reduction Scheme for Aviation (“CORSIA”), framework, such feedstocks are broadly categorized into five categories^[4]: (a) primary and co-products such as  vegetable oils, sugar crops, bagasse, lignin, etc; (b) by-products such as used cooking oil, animal fats, waste fats and greases, etc.; (c) wastes such as municipal solid waste, agricultural residues, industrial waste gases, food waste, etc.; and (d) residues such as wheat straw, rice husk, wood chips, sawdust lignin, etc.

Source: Clearing the Air: Sustainable Aviation Fuel (SAF) for Transforming the Aviation Industry

3. Regulatory framework: domestic and international

International 

• ICAO: The ICAO is a United Nations agency which helps various countries to develop a network of global air mobility and promotes sustainable growth and socio-economic prosperity in the aviation sector.
• The ICAO has adopted a market-based measure, i.e., CORSIA, to reduce carbon emissions from international aviation. While India is not participating in the voluntary phases of the CORSIA (2021-2026), the offsetting requirements under CORSIA’s mandatory phase (2027-2035), which involves mandatory participation for all international flights, will be determined by the baseline level set as per emissions in 2019 and 2020 and will come into force in 2027. Under the CORSIA framework, each airline plying internationally is required to offset their GHG emissions above the set baseline^[5].
• The ICAO defines SAF as “renewable or waste-derived aviation fuels that meet sustainability criteria^[6]”. SAF is chemically and physically very similar to conventional jet fuel, which makes it highly compatible with existing aviation systems. It can be safely blended with regular jet fuel in various proportions and used without carrying out any extensive changes to the existing infrastructure. This makes SAF a “drop-in fuel,” implying that it can be directly used within current systems without the need for modifications.^[7] The National Policy on Biofuels, 2018^[8] describes “drop in fuels” as, ‘Any liquid fuel produced from Biomass, agri-residues, wastes such as municipal solid wastes, plastic wastes, industrial wastes etc. which meets the Indian standards for motor spirit,, high speed diesel,, and jet fuel, in pure or blended form, for its subsequent utilization in vehicles without any modifications in the engine systems and can utilize existing petroleum distribution system’.
• CORSIA-eligible fuels must be certified by a sustainability certification scheme (“SCS”) approved by the ICAO Council. As of 2025, there are only three approved SCS: (i) the International Sustainability and Carbon Certification (“ISCC”); (ii) SAF sustainability standards issued by the Roundtable on Sustainable Biomaterials (i.e., a non-profit organization based out of Switzerland); and (iii) ClassNK (issued by the Japanese Accreditation Board)^[9].
• The World Economic Forum has released a SAF Certificate (“SAFc”) Emissions Accounting System, where corporate and private customers looking to reduce their scope 1 and 3 GHG emissions can create a strong, long-term demand signal for certified emissions reductions from SAF use. SAFc enables companies to purchase, transparently track, and claim the emissions benefits of using SAF without having to buy the physical fuel, akin to the manner in which renewable energy certificates are claimed by entities aiming to reduce the impact of their conventional energy consumption. Once a SAFc is issued, the associated physical SAF volume is treated as if it were conventional jet fuel, and the SAFc can be used to claim reductions in direct and indirect aviation-related emissions. A digital tracking method called “book & claim” is used to trace the SAF and the SAFc through the supply chain.^[10]

• ICAO Guidance on SAF Policies^[11]: It states that clear standards and methods for certifying the sustainability of feedstock and fuel, as well as calculating, crediting, and trading the environmental attributes of SAF, will be critical to enabling national and international markets for SAF. It encourages standard processes and shared systems for calculating, crediting, and trading the environmental attributes of SAF across countries, to facilitate “book and claim”.

Domestic

• In India, the Ministry of Civil Aviation is responsible for promotion of sustainable development in the aviation industry by promoting use of sustainable alternatives such as SAF. Ministry, through the Directorate General of Civil Aviation (“DGCA”) has announced that CORSIA (i.e., the mandatory phase kicking in from 2027) will be the only framework applicable for both domestic and international flights. Under CORSIA, airlines will be required to use SAF in the required proportions or offset their emissions by purchasing carbon credits from ICAO approved schemes.
• Aircraft certification in India is provided by two regulatory bodies: (i) the Centre for Military Airworthiness and Certification, a regulatory body under the Defence Research and Development Organization, certifies the airworthiness of military aircraft, helicopters, aero-engines and other airborne stores; and (ii) the DGCA, certifies civil aircraft. As SAF blending goals kick in, DGCA will be responsible in ensuring that such goals are met by airlines in India, especially those flying international sectors.

• The National Policy on Biofuels, 2018 and the Ethanol Blending Programme have laid the foundation, through feedstock development, policy incentives, and infrastructure, for the rapid scale-up of SAF in India, especially via the ‘alcohol-to-jet’ route, making SAF a natural extension of India’s biofuel strategy. While SAF is not explicitly referenced in the policy, its inclusion is implied through the definition of “drop-in fuels”, indicating that SAF falls within the broader category of renewable fuels envisioned under the policy.

Under the Ethanol Blending Program, ethanol can be produced from sugarcane, broken rice, damaged grains, and maize. The government, in the year 2023-2024, allowed the diversion of only 2.1 metric tons of sugar for ethanol, which was increased in August 2024. However, in 2024, the government limited the use of sugarcane and its derivatives for ethanol production to 2.37 metric tons. The Indian government is actively promoting production of maize or corn production in India for fuel ethanol.

• Uttar Pradesh has launched India’s first Sustainable Aviation Fuel Manufacturing Promotion Policy, 2025 and the draft is open for comments from stakeholders and other industry players. While the copy of the policy is not available in the public domain, other states should also consider formulating similar policies and roll out incentives related to SAF along similar lines as Uttar Pradesh.
• Potential SAF producers in India are required to use one of the above referred ICAO-approved SCS bodies to certify their SAF as sustainable. In February 2025, ISCC signed a Memorandum of Understanding (“MoU”) with National Accreditation Board for Certification Bodies (“NABCB”) to provide accreditation to Indian certification bodies. NABCB-accredited Indian certification bodies will be able to certify SAF in accordance with ICAO requirements using ISCC.
• From January 17, 2024, a 50% (fifty per cent) export duty on B‑ and C‑heavy molasses has been imposed in India, to secure domestic ethanol feedstock. While this move is groundbreaking in terms of the support it provides for the Indian ethanol industry by promoting domestic sales of feedstock, this directly also improves alcohol pools which are helpful in the generation of SAF.

4. Initiatives By Key Stakeholders, Industry and PSUs

Numerous stakeholders such as petroleum refiners, technology providers, airline companies, feedstock suppliers, etc. are actively involved in and promoting the development of SAF. Several companies including the public sector undertakings are planning to or set to produce SAF in India. A few examples are as set out below:

• Topsoe, a leading global provider of advanced technology and solutions for the energy transition, currently provides the technology behind 30% (thirty per cent) of global SAF production. Industry news suggests that Topsoe is in discussions with Indian entities to act as a technology partner for upcoming SAF projects.
• Neste is the world’s leading producer of SAF with a current SAF production capability of 1 million tons per annum, which is roughly 1.25 billion litres. This is set to increase to 1.5 million tons per annum and further to 2.2 million tons in the future. With production facilities in Finland and Singapore, Neste operates the world’s largest SAF production facility in Singapore. Neste currently exports feedstock from India for its facility abroad. Neste and Airbus have entered into a collaborative agreement to accelerate the adoption of 100% (one hundred per cent) SAF in the aviation sector.
• NTPC Green Energy Limited has signed an MoU with Honeywell UOP to explore the production of SAF using carbon dioxide feedstock captured from power plants and hydrogen.
• At the G-20 Summit, India, US, and Brazil launched the Global Biofuel Alliance to enhance cooperation in use of sustainable biofuels.
• Indian Oil Corporation Limited (“IOCL”) is set to produce SAF from used cooking oil beginning December 2025 at its Panipat refinery, with a capacity of 35,000 tonnes per annum. The used cooking oil will be sourced through hotels and restaurant chains such as ITC and Haldiram’s^[12]. IOCL is also the first to receive ISCC for SAF production. IOCL has entered into a partnership with LanzaJet, a United States based clean energy technology company, to establish the SAF plant. The plant will use LanzaJet’s proprietary alcohol-to-jet technology, which converts ethanol (produced from sources like corn, cellulosic biomass, or sugar) into SAF. This project is being set up as a joint venture, with IOCL holding 50% (fifty per cent) stake in the joint venture company, 25% (twenty-five per cent) being held by LanzaJet, and the remaining 25% (twenty-five per cent) will be offered to a consortium of Indian airline companies^[13].
• Bharat Petroleum Corporation Limited is planning to invest to setup 3 (three) SAF facilities at its refineries at Mumbai, Kochi, and Bina. BPCL aims to have its first SAF production facility operational by 2027^[14]. 

5. Challenges

Since the SAF industry in its nascent phase, is facing numerous challenges, including slow commercialization of technologies, high production costs, most SAF technologies are not commercial yet, lack of supportive and adequate policies in India, including the following:

• Used cooking oil availability is inconsistent in India, as only an estimated 125,000 MT is channeled to biofuels as on date, versus a theoretical potential in the hundreds of thousands of tonnes. India consumes roughly 24 billion litres of edible oil annually, and industry sources estimate up to 60% (sixty per cent) of used cooking oil re-enters the food chain, undermining availability for various biodiesels as well as SAF. Further, a large portion of collected Indian used cooking oil is exported because offshore buyers pay more than domestic biodiesel SAF producers can afford. Further, even when the used cooking oil is re-used in India, the repeated re-use removes the calorific value of the oil, making it a less efficient source for per-unit SAF generation.
• The global SAF toolbox includes waste oils/fats (HEFA), alcohol-to-jet (AtJ), Fischer-Tropsch (FT) from biomass, and emerging thermochemical and electrofuel routes. In India, most of these pathways are not yet at commercial scale. HEFA is the most mature globally, but domestic commercialization is constrained by feedstock; AtJ is promising given India’s ethanol base but competes directly with the road E20 programme for alcohol pools; FT and other 2G/thermochemical routes remain at pilot or early-demonstration stages. India’s first large AtJ facility at IOCL Panipat, in collaboration with LanzaJet, has been announced at roughly 110 million litres per year, but sector-wide capacity remains negligible relative to even a 1–2% (one to two per cent) blend target. Industry timelines shared in public forums indicate first-of-a-kind Indian SAF plants will not be operational before 2029 even if construction starts immediately.
• Even when SAF is produced, India needs blending, storage, quality control and hydrant integration at or upstream of airports. This requires setting up terminals equipped for blending and testing, harmonised custody transfer documentation, and airport operator protocols for handling and billing. Today, only a handful of locations have trialled SAF uplift and mainstreaming will require capex by manufacturing companies and airport operators, and contractual clarity is required on who bears such storage costs.

6. Way Ahead

Although Indian policy makers remain technology agnostic, due to abundance of ethanol in India, it is likely that the ethanol to SAF story will play out in in the long term.

India has various existing policies for supporting biofuel production and blending. These policies can serve as a skeletal framework for building policies specifically for promoting production and processing of SAF. The National Biofuels Policy can incorporate and integrate SAF, while existing institutions such as IREDA, National Bank for Agriculture and Rural Development (“NABARD”), Small Industries Development Bank of India (“SIDBI”), and other public sector banks can be leveraged for the development of SAF production facilities. Establishment of a SAF Council (similar the Jet Zero Council in the United Kingdom) is recommended including representatives from government departments and relevant private stakeholders to ensure effective development of a strategy for a domestic SAF sector in India. There is an urgent need to establish a policy framework for SAF development in India.  Long term offtake agreements will play an important role in securing financing for SAF production. The expansion of the National Policy on Biofuels to include SAF can open access to equivalent policy mechanisms that can support the SAF industry in terms of guaranteed pricing, long-term offtake contracts between airline companies and oil marketing companies, and financial support for building new facilities and upgrading existing ones.

A viability gap funding scheme could be implanted for SAF production facilities, similar to the viability gap funding scheme issued for support to standalone battery energy storage systems recently. Government agencies such as the NABARD (for collection projects), public-sector banks such as the State Bank of India and SIDBI, can play important roles in disseminating information and promoting sustainable finance in green bond issuance^[15].

Endnotes:

[1] Contrails form when water vapor in jet exhaust condenses and freezes at high altitude, and they may persist and expand into cloud formations.

[2] Please refer to: https://sansad.in/getFile/loksabhaquestions/annex/1715/AU1029.pdf?source=pqalsand https://www.icao.int/sites/default/files/environmental-protection/Documents/ACT-SAF/Feasibility_Study_India.pdf

[3] Please refer to: https://www.icao.int/sites/default/files/environmental-protection/Documents/ACT-SAF/Feasibility_Study_India.pdf

[4] Please refer to: https://www.icao.int/environmental-protection/saffeedstocks

[5] Please refer to: https://sansad.in/getFile/annex/268/AU2728_zDAEsR.pdf?source=pqars

[6] Please refer to: Annex 16 – Environmental Protection, Volume IV, Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

[7] Please refer to: https://www.iata.org/contentassets/d13875e9ed784f75bac90f000760e998/saf-what-is-saf.pdf

[8] Please refer to: https://mopng.gov.in/files/uploads/NATIONAL_POLICY_ON_BIOFUELS-2018.pdf

[9] Please refer to: https://www.classnk.or.jp/hp/en/authentication/scs/

[10] Please refer to: https://www.icao.int/sites/default/files/environmental-protection/Documents/ACT-SAF/ACT-SAF-Series-6-SAF-accounting-and-book-and-claim-systems.pdf

[11]Please refer to: https://www.icao.int/environmental-protection/Documents/SAF/Guidance%20on%20SAF%20policies%20-%20Version%201.pdf

[12] Please refer to: https://www.business-standard.com/industry/aviation/india-saf-blending-domestic-flights-2030-deloitte-isma-125091201118_1.html

[13] Please refer to: https://iocl.com/NewsDetails/59413, https://economictimes.indiatimes.com/industry/energy/oil-gas/indian-oil-us-based-lanzajet-to-set-up-indias-first-green-aviation-fuel-firm/articleshow/99442930.cms?from=mdr, and https://www.theindustryoutlook.com/manufacturing/news/indian-oil-usbased-lanzajet-to-build-up-india-s-first-green-aviation-fuel-firm-nwid-4431.html

[14] Please refer to: https://economictimes.indiatimes.com/industry/renewables/bpcl-may-invest-rs-1400-crore-in-green-aviation-fuel-units/articleshow/111066422.cms?from=mdr and https://www.business-standard.com/companies/news/used-cooking-oil-to-produce-sustainable-aviation-fuel-indian-oil-chairman-125081700135_1.html

[15] Please refer to: https://www3.weforum.org/docs/WEF_Clean_Skies_for_Tomorrow_India_Report_2021.pdf