India’s SAF push could transform airlines, airports and air travel

India’s planned move towards Sustainable Aviation Fuel (SAF) blending from 2027 may look small at first glance, but industry experts believe it could trigger a major shift across the country’s aviation sector in the coming years.

The government had earlier issued a notification recognising SAF as aviation fuel and proposed indicative blending targets of 1 per cent by 2027, 2 per cent by 2028 and 5 per cent by 2030. Officials from India’s oil companies now expect formal mandates to follow under the upcoming SAF policy.

The push is being driven not just by environmental concerns, but also by global aviation regulations. From January 2027, airlines from countries participating in ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), including India, will have to offset emissions from international flights that exceed 85 per cent of 2019 levels. This means airlines that fail to reduce emissions through measures like SAF could face rising carbon-related costs in future.

How will it benefit the passengers?

For passengers, the immediate impact is expected to be limited. Industry estimates suggest the initial 1 per cent SAF blending could increase airfares by around Rs 100–200 per ticket. However, the bigger advantage lies in making air travel more sustainable without changing the passenger experience significantly.

Unlike futuristic technologies such as hydrogen-powered aircraft, SAF can be used with existing aircraft and airport infrastructure. This allows airlines to reduce emissions while continuing normal operations. In the long run, passengers could benefit from airlines maintaining stronger international connectivity and avoiding much larger environmental surcharges that may emerge globally in future.

Will this be added pain-point or opportunity for Airlines?

For Indian airlines, SAF represents both a challenge and an opportunity. While it helps carriers align with global sustainability goals and international aviation rules, SAF currently costs three to five times more than conventional aviation turbine fuel.

This creates pressure on airline operating costs, especially in India’s highly price-sensitive market. Airlines will need to carefully balance sustainability commitments with profitability. At the same time, carriers that adopt SAF early could strengthen their position on international routes where environmental regulations are becoming increasingly strict.

India’s oil companies prepare for SAF production

One of the most important developments is that India’s public sector oil companies are already preparing for SAF production before the mandates officially begin.

Indian Oil Corporation plans to start SAF production from used cooking oil at its Panipat refinery by September 2026. Bharat Petroleum is also developing a SAF co-processing facility at its Mumbai refinery, while Hindustan Petroleum has highlighted India’s advantages in feedstock availability and refinery infrastructure.

Industry estimates suggest India’s SAF demand could rise sharply from around 62,000 tonnes in 2027 to nearly 380,000 tonnes by 2030. This has opened discussions on whether India could eventually become a regional hub for SAF production, supported by its refinery network, agricultural waste resources and ethanol ecosystem.

Impact on the aviation

The SAF transition is expected to influence the wider aviation ecosystem, including airports, aircraft manufacturers and maintenance companies. Airports may eventually require dedicated blending and storage infrastructure, while aircraft and engine manufacturers continue expanding SAF compatibility testing. For the maintenance, repair and overhaul (MRO) sector, SAF adoption could lead to new requirements in fuel system inspections, materials monitoring and sustainability compliance processes.

Industry experts believe the shift will gradually create new opportunities in aviation engineering, fuel logistics and green aerospace technologies.

Policy support

Despite the growing momentum, industry stakeholders say government support will be critical during the early years of SAF adoption. Indian oil companies have already sought tax relief, viability gap funding and incentives to help reduce the high production costs of SAF.

Globally, countries such as the United States and the United Kingdom already provide financial support to SAF producers through subsidies and tax credits. Experts believe India will also need stable policy support if it wants to scale SAF production without placing excessive financial pressure on airlines or passengers.

More than a fuel shift

Industry observers say India’s SAF roadmap is not just about blending cleaner fuel into aircraft tanks. It represents the beginning of a larger transformation that could reshape airline economics, airport infrastructure and the country’s future aviation strategy.