Government's new draft policy for Sustainable Aviation Fuel blending in international flights

A new draft policy has been introduced by the Central Government for the mandatory blending of Sustainable Aviation Fuel (SAF) for international flights. The government's primary objective is to reduce emissions in the aviation sector through the use of Sustainable Aviation Fuel and to establish a domestic supply chain for this fuel within the country. According to the draft policy, it will be mandatory to blend locally produced Sustainable Aviation Fuel with conventional jet fuel in flights operating on international routes.

The draft policy outlines a phased roadmap for blending. As per the draft policy, there will be a requirement for 1% SAF blending in 2027, which will increase to 2% in 2028, 3% in 2029, and up to 5% by 2030. Additionally, a target to achieve 20% blending by 2040 has also been set, although this target has been presented as 'indicative'. The National Council on SAF will decide which of these targets will become mandatory, taking into account factors such as the preparedness of the SAF supply chain, technology, and market conditions.

According to a report by The Economic Times, airlines will be required to procure approximately 90% of their Aviation Turbine Fuel (ATF) from international airports to prevent economic tankering. If airlines or oil marketing companies fail to comply with these rules, they may also face penalties.

According to a report by Hindustan Times, Sustainable Aviation Fuel (SAF) is an alternative fuel made from non-petroleum feedstocks, which can reduce pollution caused by air transport. Compared to conventional jet fuel, SAF can reduce carbon dioxide emissions by up to 80% during its lifecycle. However, the cost of this fuel may be at least two to three times higher than conventional jet fuel.

The government is considering providing financial incentives and support measures to promote production in this sector. This may include assistance through existing or new schemes, green bonds, and tax exemptions. Specific financial measures may include issues such as exemption or reduction in GST, relief in import duty, income-tax holidays, and accelerated depreciation, which will be under consideration by the relevant ministries and departments.

There is significant potential for the production of this fuel in India. Approximately 230 million tonnes of additional agricultural waste is available in the country that can be used to make this fuel. In addition, feedstocks such as used cooking oil and ethanol can also be used. To support research and development in this sector, there is a proposal to create an SAF Innovation Seed Fund of approximately ₹ 500 crore under the Centre for High Technology, which operates under the Ministry of Petroleum.

Under the new policy, only SAF produced in India will be considered eligible. This fuel will be blended with conventional ATF at the production facility, refinery, or intermediate storage point before being supplied to the airport. To oversee this process, a digital National SAF Registry will be maintained by the Directorate General of Civil Aviation (DGCA). Through this registry, SAF production, blending, and transactions will be tracked. Every transaction will be supported by a digitally secure certificate, which will include details of the fuel batch, origin of feedstock, producer, and reduction in emissions.

The requirement for this proposed blending will initially apply to international flights coming under the International Civil Aviation Organization (ICAO) CORSIA framework, where fuel suppliers will need to blend SAF with ATF.

Sustainable Aviation Fuel is a fuel made from non-petroleum based sources that causes less harm to the environment.