India may mandate sustainable aviation fuel from 2027: What it means for airlines and airfares

India plans to introduce sustainable aviation fuel blending in international flights from 2027, starting at 1% and gradually raising the requirement to 40% by 2040.

India is preparing to introduce sustainable aviation fuel (SAF) in international flights, with mandatory blending proposed to begin in 2027. The move is part of the government's efforts to reduce aviation emissions and build domestic capacity to produce sustainable aviation fuel.

Under the draft National Policy on Sustainable Aviation Fuels circulated by the Ministry of Civil Aviation, airlines would initially be required to blend 1% SAF into conventional aviation fuel from 2027.

The proposed roadmap would gradually raise the blending requirement over the following years, taking it to as much as 40% by 2040, according to a PTI report.

The policy also aims to strengthen domestic SAF production, with at least 90% of the annual SAF requirement for international flights proposed to be sourced from India.

But what exactly is sustainable aviation fuel, how is it different from conventional jet fuel, and will its introduction make air travel more expensive?

What is sustainable aviation fuel (SAF)?

Sustainable aviation fuel is an alternative to conventional aviation turbine fuel (ATF), which is used to power commercial aircraft. It is produced from alternative feedstocks such as used cooking oil, agricultural residues, biomass waste, municipal solid waste and other renewable sources.

Unlike conventional jet fuel, which is derived from fossil fuels, SAF is produced using renewable or waste-based materials. According to the International Air Transport Association (IATA), it can reduce lifecycle carbon emissions by around 80% compared with conventional aviation fuel.

SAF is also known as a 'drop-in fuel' because it can be blended with conventional ATF and used in existing aircraft engines without requiring major modifications.

What is India's proposed SAF blending timeline?

The draft policy proposes introducing mandatory SAF blending in two phases, with the requirement starting at a relatively low level before increasing gradually over the following years.

Under the proposed roadmap, SAF blending in international aviation fuel will begin at 1% in 2027, rise to 2% in 2028 and reach 5% by 2030.

The second phase, covering 2031 to 2040, proposes a gradual increase in the blending requirement, with the target reaching 40% by 2040.

The proposal also includes measures to encourage domestic production. These include GST reductions or exemptions, import duty waivers, green financing, viability gap funding and support for refinery retrofitting.

Is SAF more expensive than conventional aviation fuel?

Yes. SAF currently costs several times more than conventional aviation fuel, making large-scale adoption one of the biggest challenges for the aviation industry.

According to IATA, the higher cost is linked to expensive feedstocks, developing production technologies, limited infrastructure and the significant initial investment required to scale up production.

SAF currently accounts for less than 1% of global aviation fuel consumption. Expanding production capacity and improving availability will be crucial to bringing down costs over time.

Will airfares become more expensive after SAF blending?

The introduction of SAF could increase operating costs for airlines because sustainable aviation fuel is currently more expensive than conventional ATF.

However, the impact on ticket prices will depend on several factors, including SAF prices, the blending requirement, domestic production capacity and the financial support offered by the government.

With the initial blending requirement proposed at just 1% in 2027, the immediate impact on airline operating costs may be limited. However, the cost implications could become more significant as the mandatory blending share increases.

The government has indicated that it wants to achieve the initial blending target in a cost-effective manner while ensuring that passengers face the least possible financial burden.

Earlier, Civil Aviation Minister Ram Mohan Naidu said, "We have to ensure that this process imposes the least possible burden on passengers and airlines. For that we need to study all the possible SAF pathways and within pathways identify the most cost-effective mechanism right from production to drop-in at the airport."

Will aircraft engines need modifications to use SAF?

No major engine modifications are required to use approved SAF blends. SAF is designed as a drop-in fuel, meaning it has properties similar to conventional aviation fuel and can be blended with ATF for use in existing aircraft.

The Ministry of Petroleum and Natural Gas has also clarified that SAF undergoes rigorous testing against international aviation standards before being approved for use.

Are other countries already using sustainable aviation fuel?

Yes. Several countries have introduced SAF blending mandates or are encouraging airlines and fuel producers to increase its use.

The European Union, the United Kingdom, Japan and Singapore have announced targets to expand SAF consumption in the aviation sector.

The European Union has mandated a 2% SAF blend in 2025, which is set to increase to 6% by 2030 and 70% by 2050. The United Kingdom has also introduced targets of 2% in 2025, 10% in 2030 and 22% by 2040.

Japan aims to achieve 10% SAF blending by 2030, while Singapore has mandated a 1% blend from 2026, with plans to increase it to 3-5% by 2030. Meanwhile, the United States is supporting SAF production through incentives rather than mandatory blending targets.

According to IATA, SAF is already being used on commercial flights, although its share of total global aviation fuel consumption remains very small.

How will SAF help reduce aviation emissions?

Reducing emissions from the aviation sector remains a major focus for the industry. SAF can help address this challenge by lowering emissions across the fuel's lifecycle.

Unlike conventional ATF, which relies on fossil fuels, SAF can be produced from renewable materials and waste products. According to IATA, it can reduce lifecycle carbon emissions by around 80% compared with conventional jet fuel.

IATA estimates that SAF could contribute up to 65% of the emissions reductions needed for the aviation industry to achieve net-zero carbon emissions by 2050.

The fuel is also important for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), developed by the International Civil Aviation Organization (ICAO).

CORSIA's mandatory phase begins on January 1, 2027, requiring participating international aviation operators to address emissions above the applicable baseline. Using eligible SAF can help airlines reduce the emissions they need to offset.

India's plans to expand domestic SAF production

Along with introducing blending requirements, the government wants to establish a domestic SAF manufacturing ecosystem and reduce dependence on imported sustainable aviation fuel.

According to estimates in the draft policy, India's annual ATF consumption is expected to increase from around 8.2 million tonnes currently to nearly 14.2 million tonnes by 2030.

The country could have the potential to produce around 10 million tonnes of SAF annually by 2040. However, achieving this target would require investments of approximately $70-85 billion.