India’s existing ethanol production capacity could provide a strong foundation for domestic sustainable aviation fuel (SAF) production, but unpredictable feedstock policies and the absence of long-term purchase guarantees remain major barriers to investment, according to Bharati Balaji, deputy director general of the All India Distillers’ Association (AIDA).
Speaking to Hindustan Times in an interview, Balaji said India has approximately 2,200 crore litres of installed annual ethanol capacity, including around 1,300 crore litres of grain-based capacity. She estimated that even a 5% SAF blending requirement across India’s projected aviation turbine fuel (ATF) consumption of 14.2 million tonnes in 2030 would require only around 160–200 crore litres of ethanol.
Balaji told Hindustan Times that feedstock availability was not the industry’s biggest challenge. Instead, she identified policy uncertainty, particularly changing rules governing the availability of sugar-based and grain-based feedstocks, as a major obstacle to investment in alcohol-to-jet (ATJ) facilities.
Long-term procurement needed to attract investment
Discussing India’s proposed SAF policy, Balaji told Hindustan Times that the proposed blending trajectory of 1% in 2027 and 5% by 2030, along with the requirement for domestically produced SAF, were positive steps. However, she said investors also needed a long-term blending mandate extending beyond 2030, incentives for early investments, assured procurement and internationally recognised certification.
According to Balaji, an ATJ plant involves a 15–20-year investment commitment, making it difficult for producers to secure financing based on a five-year blending mandate. She called for 10–15-year SAF offtake agreements, published pricing formulas for SAF and ethanol supplied to ATJ plants, and a mechanism to bridge the cost difference between SAF production and conventional aviation fuel.
On financial support, Balaji told Hindustan Times that the proposed incentives, including GST relief, import duty waivers, income-tax holidays, accelerated depreciation, viability gap funding and green finance, offered a starting point. She also recommended interest subvention and capital support for distilleries integrating or co-locating ATJ facilities.
Feedstock policy remains a concern
Balaji highlighted restrictions on the use of sugarcane juice and B-heavy molasses for ethanol production during the 2026–27 ethanol supply year, quarterly limits on Food Corporation of India rice allocations and rising maize prices as factors affecting feedstock access.
Speaking to Hindustan Times, she noted that maize prices had increased to approximately ₹27 per kg from ₹17–18 per kg a year earlier. She argued that a SAF facility designed to operate for two decades cannot be financed reliably when feedstock policies change frequently.
She also advocated a feedstock-neutral SAF policy, under which ethanol produced from molasses, sugarcane juice and syrup, maize, surplus FCI rice, damaged grains and agricultural residues would qualify based on lifecycle emissions performance.
Commercial SAF production expected by 2029–30
On the readiness of domestic technology, Balaji told Hindustan Times that alcohol-to-jet was an established and internationally certified SAF production pathway. She cited Praj’s integrated ethanol-to-jet demonstration, IndianOil’s ATJ project at Panipat and GPS Renewables’ ethanol-to-jet plant under development in Andhra Pradesh as examples of progress towards commercial investment.
However, she estimated that commercial-scale SAF production in India was realistically a 2029–30 prospect.
Balaji also highlighted the potential of India’s existing ethanol infrastructure, including around 380 sugar- and grain-based distilleries with approximately 2,000 crore litres of annual capacity, to supply future ATJ facilities. According to her, SAF could create a higher-value market for under-utilised ethanol capacity following the achievement of the E20 blending target, while supporting incomes for sugarcane and maize farmers.
She further told Hindustan Times that existing ethanol procurement, quality testing, logistics and record-keeping systems developed through oil marketing companies’ operations could provide a foundation for the traceability and chain-of-custody requirements associated with SAF certification.
Balaji told Hindustan Times that SAF policy implementation would require coordination between the Ministry of Civil Aviation, the Ministry of Petroleum and Natural Gas, the Department of Food and Public Distribution, and other government departments responsible for agriculture, finance and renewable energy.
She proposed that the planned National Council on SAF include relevant ministries, the Directorate General of Civil Aviation, the Bureau of Indian Standards, industry associations and producer bodies.
The interview highlights the importance of aligning India’s ethanol policy with its emerging SAF ambitions, particularly through predictable feedstock access and long-term commercial arrangements.
