India is expected to introduce a requirement for sustainable aviation fuel (SAF) to account for 1% of conventional aviation turbine fuel (ATF) used on international flights from January 2027, but industry stakeholders are seeking greater clarity on the country’s policy framework, carbon-credit rules and support for domestic production.
The proposed requirement would be the first step in a phased approach, with blending targets of 2% in 2028 and 5% in 2030. However, these targets have previously been announced as indicative targets, and a formal, enforceable mandate should not be treated as notified until the government confirms the relevant rules. The Ministry of Petroleum and Natural Gas announced the indicative targets and subsequently amended the ATF regulatory framework to recognise SAF-blended fuel.
As reported by The Hindu, aviation industry sources have raised concerns about the limited time remaining before the mandatory phase of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) begins in January 2027, particularly in the absence of a comprehensive domestic SAF policy and a clear framework for carbon credits.
CORSIA compliance puts aviation emissions in focus
CORSIA is the International Civil Aviation Organization’s (ICAO) global scheme for addressing the growth of international aviation emissions. Its mandatory phase begins in 2027 for covered international routes, requiring participating airlines to meet applicable offsetting obligations for emissions above the scheme’s baseline.
Airlines can reduce their CORSIA obligations through eligible emissions-reduction measures, including the use of qualifying SAF and eligible carbon credits, subject to the scheme’s sustainability and eligibility criteria. The availability of compliant fuels and credits will therefore be important to airlines preparing for the next phase of implementation.
Industry estimates cited in The Hindu indicate that Indian airlines could face an annual offsetting liability of around 5 million tonnes of CO₂, potentially requiring a corresponding volume of eligible carbon credits. Rohit Kumar, secretary general of the SAF Association, estimated that credits priced at $10–15 each could translate into an annual cost of approximately $50 million to $75 million.
Air India is expected to account for a substantial share of the potential liability because of its extensive long-haul and ultra-long-haul international network. These figures are industry estimates, rather than a confirmed assessment of the final compliance costs for individual airlines.
Industry seeks a comprehensive national SAF policy
Stakeholders are calling for a national SAF policy covering blending requirements, pricing mechanisms, domestic production, exports and the commercial arrangements needed to scale supply.
They are also seeking clearer rules for carbon-credit eligibility, international authorisation of emissions-reduction projects, emissions reporting and airline compliance. These mechanisms will influence how operators demonstrate compliance and how fuel producers and project developers assess investment opportunities.
Kumar told The Hindu that a supportive policy environment could help attract investment, strengthen domestic supply chains, advance technology development and encourage international partnerships.
The policy challenge extends beyond setting a blending percentage. SAF production pathways require suitable feedstocks, processing capacity, fuel certification and dependable buyers. Without clarity on these elements, producers and airlines may face uncertainty over project economics and the allocation of additional costs.
India’s SAF production potential and refinery capacity
India has potential access to several feedstocks for SAF production, including used cooking oil, agricultural residues and other waste-based materials. Industry stakeholders see this resource base as an opportunity to develop domestic production and potentially serve export markets.
An ICAO feasibility study cited in the source report estimates India’s SAF production potential at 14 million to 33 million tonnes annually, based on the feedstocks and production pathways assessed. This represents estimated potential, not currently available commercial production capacity.
The source report identifies Indian Oil Corporation’s Panipat refinery as a key part of India’s initial supply preparations. The facility is reported to have a capacity of around 30,000 tonnes for SAF production through the co-processing of used cooking oil with conventional fuel. Indian Oil is also developing an alcohol-to-jet (ATJ) unit, which could support the expansion of production through a different technological pathway.
The distinction between potential output and operational capacity will be important as India approaches its initial blending target. Scaling production will depend on plant commissioning, feedstock availability, fuel qualification, investment and the ability to supply fuel that meets the relevant technical and sustainability requirements.
Producers and airlines seek financial support
Oil marketing companies are seeking government support through measures such as subsidies and offtake guarantees to help establish a viable domestic SAF market. Airlines, meanwhile, want the cost of SAF to become more competitive with conventional aviation turbine fuel.
The source report puts SAF prices at approximately two to five times the price of conventional ATF, underlining the commercial challenge of increasing uptake while limiting the burden on airlines.
A long-term policy framework could help clarify how the additional costs are shared between fuel producers, oil marketing companies, airlines and, potentially, passengers. Production incentives, demand commitments and predictable blending requirements could also affect investment decisions across the SAF supply chain.
However, the design of any support mechanism will matter: its effectiveness will depend on whether it helps close the cost gap, supports sustainable feedstock use and encourages production capacity that can operate commercially over the long term.
International mandates add pressure on Indian carriers
India’s emerging SAF framework is developing alongside requirements in other aviation markets. The European Union introduced a 2% SAF share requirement for aviation fuel supplied at covered EU airports in 2025, increasing to 6% in 2030. The United Kingdom’s mandate began at 2% in 2025 and is scheduled to rise to 10% by 2030.
Singapore has also set a 1% SAF target for departing flights from January 1, 2027, supported by a levy mechanism, according to the source report.
These requirements can affect Indian airlines operating flights from airports covered by foreign regulations, independently of the final design of India’s own mandate. Airlines may therefore need to manage multiple compliance frameworks, procurement arrangements and fuel-cost implications across their international networks.
Bioenergy Business Analysis
India’s proposed SAF blending requirement represents a potential turning point for the country’s aviation-fuel market, but the immediate challenge is implementation. Indicative targets alone do not establish all the rules that producers, fuel suppliers and airlines need to make long-term commercial decisions.
The government has already taken an enabling regulatory step by bringing SAF-blended aviation fuel within the ATF regulatory framework. It has also announced indicative blending targets of 1% in 2027, 2% in 2028 and 5% in 2030. The remaining question is how these targets will be translated into enforceable obligations and supported by a functioning domestic market.
India’s estimated feedstock and production potential offers an opportunity to build a larger SAF industry, but potential resources should not be confused with certified fuel available at scale. Refinery investment, technology deployment, reliable feedstock sourcing, fuel certification and long-term offtake arrangements will determine how quickly supply can grow.
For the aviation sector, the cost of SAF and access to eligible carbon credits will remain central to compliance planning. For policymakers, the task is to provide a predictable framework that supports domestic production while maintaining sustainability standards and making the transition commercially workable.
The effectiveness of India’s SAF strategy will ultimately depend not only on the blending percentage it sets, but also on whether the regulatory, production and financial systems needed to deliver it are in place.
