India Proposes Mandatory SAF Blending From 2027, 40% Target By 2040

India has proposed mandatory Sustainable Aviation Fuel (SAF) blending with conventional jet fuel from 2027, starting at 1 per cent and potentially rising to 40 per cent by 2040. The Ministry of Civil Aviation has circulated the draft National Policy on Sustainable Aviation Fuels to develop domestic production and reduce aviation emissions.

Sustainable Aviation Fuel is a greener alternative to conventional aircraft fuel, made from materials such as used cooking oil, agricultural waste, municipal solid waste and industrial waste instead of relying entirely on crude oil. It is a drop-in fuel, meaning it can be blended with conventional Aviation Turbine Fuel (ATF) and used in existing aircraft engines without major modifications. It can also significantly reduce carbon emissions over its lifecycle compared with conventional jet fuel.

The proposal will be implemented in two phases. Blending will increase from 1 per cent in 2027 to 5 per cent in 2030, followed by higher targets between 2031 and 2040. Only indigenously manufactured SAF will qualify. However, the 40 per cent target is described differently across reports, with another account of the draft indicating 20 per cent by 2040 and subsequent targets to be finalised by the proposed national council.

Airlines operating international services will also have to uplift at least 90 per cent of their annual sector fuel requirements from Indian international airports to prevent economic tankering, or carrying extra fuel to avoid higher prices elsewhere. Domestic flights are exempt from this requirement, according to reports on the draft.

India's ATF consumption is projected to rise from 8.2 million tonnes to 14.2 million tonnes by 2030. The country could produce 10 million tonnes of SAF annually by 2040, requiring $70-85 billion in investments. Potential feedstocks include agricultural residues, used cooking oil, municipal waste and industrial waste.

Proposed incentives include GST relief, import duty waivers, income-tax benefits, accelerated depreciation, viability gap funding, green financing and refinery upgrades. A dedicated SAF Innovation Seed Fund, National Council on SAF and DGCA-managed digital registry are also proposed, alongside sustainability certification and airport infrastructure development.

However, SAF can cost two to three times more than conventional ATF, raising concerns about airline expenses and passenger fares. The policy also faces challenges involving feedstock availability, production capacity and competition from other biofuel industries.

Meanwhile, regional airlines are seeking the revival of the Rs 10,000-crore ATF Price Stabilisation Fund, discontinued in July after failing to attract takers. Star Air has cut flights from 68 to 52. Regional operators say they consume just 3 per cent of ATF but serve 30-35 per cent of unique routes. They want revised support as fuel prices, international tensions and airspace restrictions squeeze operations.

SAF is a drop-in fuel compatible with existing aircraft engines, but the proposals remain subject to government approval.