India Drafts SAF Mandate: 1% Blending in Jet Fuel From 2027

India's civil aviation ministry has circulated a draft National Policy on Sustainable Aviation Fuels that mandates 1 per cent SAF (sustainable aviation fuel, a drop-in fuel compatible with conventional jet fuel) blending in Aviation Turbine Fuel from 2027, rising to 40 per cent by 2040. The policy would require airlines to use only indigenously manufactured SAF.

The draft sets a two-phase implementation schedule. The first phase, running from 2027 to 2030, increases the blending obligation from 1 per cent to 5 per cent. The second phase, from 2031 to 2040, raises the mandate to 40 per cent.

What does the policy change for international carriers?

Airlines operating international services to and from India would have to uplift a minimum of 90 per cent of their annual fuel requirement at Indian international airports. At least 90 per cent of the annual SAF requirement for international flights must be sourced from within India.

The uplift rule targets what the ministry calls "economic tankering" — the practice of loading extra fuel at the departure airport when fuel is cheaper there than at the destination. Fuel requirement calculations will cover trip fuel and taxi fuel only, excluding contingency, alternate reserve and additional fuel as approved by the regulator DGCA (Directorate General of Civil Aviation).

The fiscal package

The ministry proposes a broad set of incentives to build domestic SAF production capacity. These include:

• GST (Goods and Services Tax) exemption or reduction
• Import duty waivers
• Income-tax holidays and accelerated depreciation
• Viability gap funding and green financing instruments
• Refinery retrofitting support

The draft states that "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" would be on the table. All measures remain subject to approval by the relevant ministries.

Demand and investment projections

India's annual ATF consumption is projected to reach nearly 14.2 million tonnes by 2030, up from 8.2 million tonnes at present. The country has the potential to produce roughly 10 million tonnes of SAF annually by 2040, which the draft estimates will require investments of USD 70-85 billion.

The identified feedstocks include surplus agricultural residues, used cooking oil, municipal solid waste, industrial waste streams and renewable fuels of non-biological origin (synthetic fuels made from renewable energy and captured carbon).

Institutional architecture

The draft proposes establishing a National Council on Sustainable Aviation Fuel (NC-SAF) as an apex body to ensure coordinated, transparent and effective implementation of the policy.

A dedicated SAF Innovation Seed Fund would support pilot projects, indigenous technology development, feedstock optimisation, lifecycle assessment studies and incubation support for startups and technology developers working on advanced SAF pathways.

The DGCA would host a SAF Registry as a national digital platform. "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 states.

The policy also envisages a comprehensive ecosystem covering sustainability certification systems, chain-of-custody mechanisms, viability gap funding, green financing instruments, refinery retrofitting support and airport infrastructure readiness to enable large-scale deployment across the aviation value chain.

The draft remains at the consultation stage within government; its blending trajectory, if adopted, would impose measurable cost and supply obligations on Indian and foreign carriers serving one of the world's fastest-growing aviation markets from 2027 onward.