India Proposes Mandatory SAF Blending From 2027, 5% by 2030

India's Ministry of Civil Aviation has proposed a mandatory 1% blend of sustainable aviation fuel (SAF, jet fuel made from waste or renewable feedstocks rather than crude oil) in aviation turbine fuel for international flights from January 2027, rising to 5% by 2030 and 20% by 2040.

The draft National Policy on Sustainable Aviation Fuels-2026 sets out a phased roadmap. The first phase, running 2027–2030, would be mandatory: 1% in 2027, 2% in 2028, 3% in 2029 and 5% in 2030.

The second phase carries indicative targets only: 6% by 2031, 8% by 2032, 10% by 2035 and 20% by 2040. Those figures would become mandatory only on decisions of a proposed National Council on Sustainable Aviation Fuel (NC-SAF), which would weigh technological readiness, market conditions and supply-chain capacity before locking them in.

Which flights and which fuel count?

The mandate applies to international aviation operations covered under CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation, the UN-negotiated scheme requiring airlines to offset growth in international emissions). Domestic operations of Indian carriers fall outside the fuel-uplift obligation.

The draft policy also proposes that both Indian and foreign airlines operating scheduled international services uplift at least 90% of their annual sector-specific fuel requirements at international airports in India. The provision targets economic fuel tankering — the practice of carrying extra fuel from cheaper markets — and is designed to create assured demand for domestically produced SAF.

One provision is decisive for suppliers: only SAF manufactured in India qualifies for blending under the mandate. Imported SAF would not count.

Who blends, and where?

Oil marketing companies and authorised fuel suppliers would carry the blending obligation and be responsible for fuel availability at airports. The policy envisages blending at SAF production facilities, refineries or intermediate storage facilities before the fuel reaches airports, rather than at the airport hydrant system itself.

That allocation matters commercially. Airlines would buy blended fuel through existing supply chains, while producers and marketers carry compliance risk — a structure that shifts the investment burden upstream.

What does this change for airline costs?

The cost question is the policy's own central tension. The draft estimates SAF will be at least two to three times more expensive than conventional jet fuel, requiring financial and policy support during the initial implementation phase.

To bridge that gap, the government proposes exploring financial incentives, green financing, tax support and viability gap funding (public money covering part of the gap between a project's cost and its revenue) to encourage investment in SAF production and infrastructure.

For international carriers serving India, the 90% uplift rule combined with a domestic-only SAF requirement means their India-bound fuel bills would carry the SAF premium from 2027, a cost they cannot avoid by tankering fuel from abroad.

The $70–85 billion production bet

The draft policy estimates India's SAF production potential at nearly 10 million tonnes annually by 2040, requiring investment of around $70–85 billion.

It identifies four feedstock streams: agricultural residues, used cooking oil, municipal solid waste and industrial waste streams.

The government's stated aim is to use those resources to build a domestic SAF ecosystem, reduce dependence on imported fossil fuels and position India as a global hub for sustainable aviation fuel production.

Whether the 2027 start date survives consultation will depend largely on whether domestic production capacity and the promised financial support mechanisms materialise before the mandate bites — the draft itself concedes that targets beyond 2030 will only harden once supply chains are proven.