India can produce sustainable aviation fuel (SAF) at cost up to 40 per cent lower than global benchmarks by combining agricultural residue with low-cost solar-based green hydrogen, according to a new report released by the India Energy & Climate Center (IECC) at the University of California, Berkeley, and Energy Innovation.
The report, India’s Aviation Opportunity: Turning Agricultural Residue and Low-Cost Solar into Competitive Sustainable Aviation Fuel with Power-and-Biomass-to-Liquids, identifies an opportunity to address multiple challenges simultaneously, including crop residue burning, dependence on imported fossil fuels and the need for new export industries.
According to the report, India is among the few countries with abundant agricultural residue and some of the world’s lowest-cost renewable power for green hydrogen production, giving it a competitive advantage in the emerging global SAF market.
Global demand for SAF is expected to rise as airlines in Europe, the United Kingdom, West Asia and the Asia-Pacific region face blending mandates and climate commitments. However, supply remains well below anticipated demand.
The report estimates that supplying one-quarter of the global SAF market could generate annual export revenues of $9 billion by 2030, increasing to about $30 billion annually by 2040. This would require only around 4 per cent of India’s surplus crop residue by 2030 and about 13 per cent by 2040.
The report highlights that every winter, open-field crop residue burning contributes significantly to air pollution across northern India. It argues that the same residue could instead become feedstock for a clean aviation fuel industry.
The opportunity also comes as recent tensions in West Asia have highlighted the vulnerability of oil-importing economies to fluctuations in crude oil and aviation turbine fuel prices. India imports most of its crude oil requirements, making aviation fuel one of the largest operating costs for airlines.
“India does not need to choose between clean air, energy security and industrial growth,” said Amol Phadke, faculty director, India Energy & Climate Center, University of California, Berkeley.
“Our analysis shows that India can produce sustainable aviation fuel at costs up to 40 per cent lower than global benchmarks by combining crop residue with low-cost green hydrogen. This is a rare opportunity to turn a domestic air-pollution challenge into a strategic clean-fuel export industry.”
The report focuses on a production pathway known as power-and-biomass-to-liquids (PBtL). Under this process, agricultural residues such as rice straw, wheat straw and cotton stalks are gasified and combined with green hydrogen produced using solar power. The resulting synthesis gas is then converted through the Fischer-Tropsch process into liquid fuels, including aviation fuel that can be used in existing aircraft.
Unlike ethanol-to-jet pathways that rely on food or sugar crops, PBtL uses surplus agricultural residue and does not require additional cropland, dedicated energy crops or major irrigation infrastructure, according to the report.
The authors argue that creating a commercial market for agricultural residue could generate additional income for farmers, support rural logistics businesses and reduce incentives for crop burning.
“The biggest advantage is that India already has the building blocks,” said José Luis Domínguez Bennett of the India Energy & Climate Center.
“The country has low-cost solar, an emerging green hydrogen industry, large volumes of agricultural residue, and companies that are already collecting and moving that residue at commercial scale. PBtL brings these strengths together into a clean fuel pathway that fits India unusually well.”
The report notes that Indian companies have already established elements of crop-residue supply chains, including aggregation, contracting, densification, storage and transportation. Digital marketplaces and private aggregators are also beginning to connect farmers with industrial buyers.
The report identifies regions around Delhi, Pune and Mumbai airports as promising locations for first-of-a-kind PBtL projects. Maharashtra, Haryana, Rajasthan and Uttar Pradesh are highlighted as strong candidates for early deployment because of their biomass availability, renewable energy potential, airport access and industrial logistics infrastructure.
While biomass gasification, Fischer-Tropsch synthesis and electrolytic green hydrogen production are commercially established technologies, the report says the key challenge is integrating them at commercial scale in India.
To accelerate deployment, the report recommends launching demonstration projects near major aviation hubs, providing concessional finance and viability gap support for green hydrogen, streamlining approvals and integrating airport logistics.
It also calls for public sector oil companies to act as anchor developers and buyers, alignment of Indian SAF certification and sustainability standards with European and United Kingdom requirements, targeted incentives for fuels produced from surplus agricultural residue and verifiable green hydrogen, and expansion of India's SAF blending targets beyond international flights.
“Mandated aviation fuel markets are looking for scalable, low-carbon supply, and India has a chance to serve that demand,” said Dan Esposito of Energy Innovation.
“If India can de-risk the first commercial PBtL projects, it can turn air pollution and waste management challenges into a durable export industry, while reducing exposure to imported oil and volatile global fuel prices.”