India drafts 1% mandatory SAF blend from 2027, rising to 40% by 2040

Indian airlines will have to blend 1 per cent sustainable aviation fuel into their jet fuel from 2027, under a draft National Policy on Sustainable Aviation Fuels circulated by the civil aviation ministry. The mandate would climb to 5 per cent by 2030 and, in a second phase running from 2031 to 2040, reach 40 per cent.

The ambition is easier to state than to fuel. India currently consumes 8.2 million tonnes of aviation turbine fuel each year, a figure the ministry expects to reach roughly 14.2 million tonnes by 2030. Meeting a 40 per cent blend on that trajectory implies a supply of indigenous SAF that barely exists today.

What does the draft policy require?

The binding core is the blending obligation: 1 per cent from 2027, rising to 5 per cent by the end of phase one in 2030, then to 40 per cent by 2040. The policy also carries a localisation clause. At least 90 per cent of the annual SAF requirement for international flights must be sourced from within India.

That requirement effectively forces carriers such as Air India, IndiGo and the international long-haul operators to buy domestic, whatever the price. For comparison, a 1 per cent blend on today's 8.2 million tonnes of ATF consumption already translates into roughly 82,000 tonnes of SAF per year.

What counts as indigenous SAF?

The government defines indigenously manufactured SAF as renewable jet fuel produced within India from domestic agricultural or industrial feedstocks. Approved routes include the Alcohol-to-Jet pathway and renewable feedstocks such as sugarcane molasses, agricultural waste, starches and biomass.

Used cooking oil, municipal solid waste, industrial waste streams and renewable fuels of non-biological origin also qualify as feedstock. The definition is broad, which is convenient, because the volumes demanded by 2040 are not.

How does Delhi plan to pay for it?

The draft policy promises a menu of fiscal incentives to make production economics work. These include GST exemption or reduction, viability gap funding for SAF-producing units, green financing instruments and refinery retrofitting support.

The ministry's own language is hedged: "fiscal and taxation support, including GST exemption or reduction, import duty waivers, income-tax holidays, and accelerated depreciation, as may be considered appropriate by the relevant ministries and departments." The qualifier does the heavy lifting. Nothing is committed yet.

The cost of the ambition is quantified, at least. India can produce about 10 million tonnes of SAF annually by 2040, the draft states, requiring investments of USD 70-85 billion. Spread over the period, that is roughly USD 6-7 billion per year of capital deployment.

Who governs the mandate?

A National Council on Sustainable Aviation Fuel (NC-SAF) will be set up as the apex body to ensure coordinated, transparent and effective implementation of the policy.

Verification will run through a digital ledger. "SAF Registry, under the aegis of DGCA, shall be established as a national digital platform to record, track, and verify all SAF-related transactions, ensuring transparency, accountability, and interoperability with domestic and international carbon markets," the draft policy said.

The registry design signals that Delhi intends SAF credits to be fungible with carbon markets, domestic and foreign alike. That matters for airline cost models as much as for refiners.

What is certified versus promised?

Everything here belongs in the promised column. This is a draft policy, circulated for comment, not a notified rule; the 2027 start date and the blending trajectory could shift before enactment. No production capacity figures for operating SAF plants in India appear in the draft's framing, and the USD 70-85 billion investment estimate is a projection, not a committed sum.

What is concrete is the direction. India has joined the growing list of states tying jet fuel to domestic renewable mandates, and its 40 per cent by 2040 target sits well above the trajectories adopted in most other markets. Whether Indian carriers can source 90 per cent of their international-flight SAF domestically by then depends on whether refiners find the economics persuasive enough to build first.