Aircraft to run on 40% green fuel by 2040? India proposes mandatory SAF blending from 2027

India’s aviation sector is set for a major transition from 2027, when airlines will have to start blending sustainable aviation fuel (SAF) with Aviation Turbine Fuel (ATF). The proposed mandate will begin with a 1 per cent blending requirement and rise in phases to 40 per cent by 2040, according to a draft policy circulated by the civil aviation ministry, PTI reported.

The draft National Policy on Sustainable Aviation Fuels mandates the use of indigenously manufactured SAF and proposes financial and regulatory support for domestic production. It also requires Indian and foreign airlines operating international services to source at least 90 per cent of their annual sector aviation fuel from international airports in India.

SAF blending target to rise to 40% by 2040

Under the proposal, the first phase will run from 2027 to 2030, with the SAF blending requirement increasing from 1 per cent to 5 per cent. In the second phase, from 2031 to 2040, the requirement will rise to 40 per cent.

The draft also outlines an innovation fund, a national council and a digital registry to support the implementation of the policy.

Airlines may have to source 90% of fuel from Indian airports

To prevent “economic tankering”, the ministry has proposed that Indian and foreign airlines operating international services must “uplift a minimum of 90 per cent of their annual sector aviation fuel from the international airports in India”.

Economic tankering generally refers to airlines taking on more fuel at the departure airport when fuel is more expensive at the destination airport.

The fuel requirement will be calculated based on the fuel needed for the trip and taxiing. It will exclude contingency fuel, alternate reserve fuel and additional fuel approved by the Directorate General of Civil Aviation (DGCA).

Tax relief and green financing proposed for SAF production 

The draft policy proposes incentives for SAF production, including taxation support, viability gap funding, green financing instruments and assistance for refinery retrofitting.

The ministry has proposed “fiscal and taxation support, including GST exemption or reduction, import duty waivers, income-tax holidays, and accelerated depreciation, as may be considered appropriate by the relevant ministries and departments”.

The government also plans to establish a dedicated SAF Innovation Seed Fund to support pilot projects, indigenous technology development, feedstock optimisation, lifecycle assessment studies and incubation assistance for start-ups and technology developers working on advanced SAF pathways.

India could produce 10 million tonnes of SAF annually by 2040

India’s annual ATF consumption is expected to rise from 8.2 million tonnes at present to nearly 14.2 million tonnes by 2030. The country has the potential to produce about 10 million tonnes of SAF annually by 2040, requiring investments of USD 70-85 billion, according to estimates in the draft policy.

Feedstocks for SAF can include surplus agricultural residues, used cooking oil, municipal solid waste, industrial waste streams and renewable fuels of non-biological origin. SAF is a drop-in fuel compatible with ATF.

The draft proposes a comprehensive ecosystem comprising sustainability certification systems, chain-of-custody mechanisms, viability gap funding, green financing instruments, refinery retrofitting support and airport infrastructure readiness to facilitate the large-scale deployment of SAF across the aviation value chain.

National council and digital registry planned

The policy proposes the establishment of the National Council on Sustainable Aviation Fuel (NC-SAF), which will serve as the apex body for the coordinated, transparent and effective implementation of India’s SAF policy.

“SAF Registry, under the aegis of DGCA, shall be established as a national digital platform to record, track, and verify all SAF-related transactions, ensuring transparency, accountability, and interoperability with domestic and international carbon markets,” the draft policy said.