New Delhi: India has proposed introducing a 1 per cent sustainable aviation fuel (SAF) blending requirement for international flights from January 1, 2027, with the target expected to increase gradually to 20 per cent by 2040, Zee Business reported.
The proposal is part of the draft National Sustainable Aviation Fuel Policy 2026 released by the Ministry of Civil Aviation. It outlines measures to promote the use of cleaner aviation fuel, increase domestic production, regulate fuel procurement and penalise airlines and suppliers for failing to meet the prescribed requirements.
SAF is produced from renewable and waste-based materials such as agricultural residues, used cooking oil, municipal solid waste and industrial waste. Depending on the raw materials and production process, it can reduce lifecycle carbon emissions by up to 80 per cent compared with conventional aviation fuel. It can be blended with conventional aviation turbine fuel (ATF) and used in existing aircraft engines.
Under the proposed roadmap, SAF blending will increase to 2 per cent in 2028, 3 per cent in 2029 and 5 per cent in 2030. The targets are proposed to rise further to 6 per cent in 2031, 8 per cent in 2032, 10 per cent in 2035 and 20 per cent by 2040. The National Council on SAF will decide whether the targets from 2031 onwards should be made mandatory.
The draft policy also proposes changes to fuel procurement by airlines operating international flights from Indian airports. Both domestic and foreign carriers operating scheduled international services will be required to purchase at least 90 per cent of their annual fuel requirements for international operations from Indian airports. The measure is intended to discourage airlines from carrying excess fuel to avoid purchasing it at other destinations.
The proposed requirement will not apply to airlines operating exclusively on domestic routes. Charter services, medical flights, humanitarian operations and emergency flights may also be considered for exemptions or concessions. During the initial phase, only SAF manufactured in India will qualify for blending.
The government has also proposed financial penalties for airlines and fuel suppliers that fail to comply with the blending and fuel procurement requirements. The penalty structure has not yet been specified, but the nature of the violation and its environmental impact may be considered while determining the amount.
To support domestic production, the draft policy proposes an Innovation Seed Fund of around Rs 500 crore for research, technological development and improvements in SAF manufacturing. The government is also considering incentives such as green bonds, income tax benefits and customs duty exemptions to encourage investment in the sector.
India aims to produce around 10 million tonnes of SAF annually by 2040, requiring an estimated investment of $70 billion to $85 billion.
The policy also proposes establishing a National SAF Registry under the Directorate General of Civil Aviation (DGCA). Digital certificates will be issued for individual SAF consignments to track production, supply and blending. State governments will be encouraged to support manufacturing through single-window clearances, affordable land and electricity, and tax incentives.
The proposed blending requirements could increase airline operating costs if SAF remains more expensive than conventional aviation fuel. Since fuel accounts for a significant share of airline expenditure, higher procurement costs could eventually put pressure on airfares. However, the draft policy does not propose an immediate increase in ticket prices or a separate charge on passengers.
The actual cost impact will depend on domestic production, fuel availability, government incentives and the ability of airlines to manage additional procurement expenses. The draft policy is expected to provide the framework for India’s transition towards cleaner aviation fuel while addressing the industry’s operational and financial requirements.
