New report highlights India’s potential to become a global hub for sustainable aviation fuel (SAF).
Alcohol-to-Jet fuel from ethanol pitched as the most strategic decarbonisation pathway.
Blending targets set at 1% by 2027, rising to 5% by 2030 for international flights.
High production costs and need for incentives flagged as key barriers.
Surplus agricultural residues in states like Punjab and UP could anchor SAF clusters.
India could emerge as a major global hub for Sustainable Aviation Fuel (SAF) on the back of its robust ethanol ecosystem, surplus agricultural residues and rapidly expanding aviation market, according to a new report.
The report, SAF Samarthya – The Opportunity of AtJ SAF in India, launched on September 15, 2025 by consultancy ICF in collaboration with the Sustainable Aviation Fuel Association (SAFA), underlined that with aviation contributing 2-3 per cent of global carbon emissions, India faces both a “challenge and opportunity” to decarbonise while sustaining its air travel boom.
The findings come ahead of the government’s planned national SAF policy to meet Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) norms and decarbonise the sector.
The paper pitched Alcohol-to-Jet (AtJ) SAF, produced from ethanol, as the most strategic pathway for India to cut emissions, reduce crude oil imports and create green jobs.
“India stands at a pivotal juncture in its sustainable aviation journey. We need a roadmap that not only sets the blueprint for SAF production and uptake but makes all stakeholders key custodians of this transition,” said Vasudevan S, Head of Aviation, Travel and Tourism (India & APAC), ICF, in a statement.
India has set indicative SAF blending targets of 1 per cent by 2027, rising to 5 per cent by 2030 for international flights, equivalent to around 700 million litres of SAF demand by 2030.
Industry leaders including Indian Oil Corporation (IOCL), Bharat Petroleum (BPCL), Praj Industries, TruAlt Bioenergy and Avaada Group are already investing in production capacity and technology.
There has been some early progress. Praj Industries has commissioned a one kilolitre-per-day AtJ demo plant in Pune, while IOCL recently became the first domestic firm to secure ISCC-CORSIA certification at its Panipat refinery. Several second-generation (2G) ethanol plants by IOCL, BPCL and HPCL are also coming online, ensuring a ready feedstock base.
“We believe India has the raw materials, technological know-how and entrepreneurial spirit to build a thriving SAF ecosystem. What is required now is the collective will—commitment, collaboration and bold decision-making,” Rohit Kumar, SAFA secretary general, said in a statement.
India’s Ethanol Blending Programme (EBP), which scaled petrol blending from 1.5 per cent in 2014 to 20 per cent by 2025, offers a blueprint for SAF rollout, the paper noted. Ethanol capacity has risen eightfold to 13.8 billion litres in under a decade, creating infrastructure, supply chains and policy experience that can be repurposed for AtJ.
India produces over 500 crore litres of ethanol annually and about 754 million tonnes of agricultural biomass, of which 228 million tonnes is surplus and available for energy use. Surplus feedstocks are concentrated in Punjab, Uttar Pradesh, Madhya Pradesh, Gujarat and Maharashtra, making them prime zones for SAF clusters.
“India has abundant agricultural waste, low-cost renewable energy and a large domestic aviation market. With a strategic push, we can decarbonise our skies and become a regional and global SAF hub,” Vijay Nirani, SAFA senior vice president, said in a statement.
However, high production costs — currently three to five times that of conventional jet fuel — remain the key barrier. Feedstock accounts for 50-70 per cent of costs, followed by capital-intensive conversion infrastructure.
The report called for viability gap funding of Rs 150 crore per project, production-linked incentives, tax breaks, low-interest loans and carbon credit frameworks to de-risk private investment.
It also urged a national-level mapping of feedstocks, upgrades at airports and oil marketing terminals for SAF storage and blending, industry-academia skill programmes and stronger cross-ministerial coordination.
“Government incentives, a dedicated SAF consortium, and sustainable feedstock policies will be essential. With coordinated efforts, India can drive economic growth and innovation while meeting its climate goals,” stressed Jimmy Olsson, President, SAF Association.
ICF has projected that global SAF output will grow tenfold to nearly 20 million tonnes by 2030. After meeting domestic demand, the report argued that India could tap export markets with binding SAF mandates, turning aviation decarbonisation into a major economic opportunity.
“Together, government and industry can transform India’s aviation sector into a model of sustainable growth, innovation and climate leadership,” said Ajay Mathur, Mentor, SAF Association and former DG, International Solar Alliance.
If India replicates its ethanol success in SAF, the report concluded, it could not just participate in the global clean fuel transition but shape it, emerging as a key driver of innovation, investment and leadership in sustainable aviation.