Tuesday 21 / July / 2026
New Delhi: India could emerge as one of the world's leading producers of sustainable aviation fuel (SAF), transforming agricultural waste and abundant renewable energy into a multibillion-dollar export industry, according to a new joint study by the IECC at the University of California, Berkeley, and Energy Innovation.
The report comes as the aviation industry struggles to meet its decarbonisation goals. The International Air Transport Association (IATA) estimates that SAF currently accounts for just 0.6% of global jet fuel consumption, far below the 65% share required by 2050 for the aviation sector to achieve net-zero carbon emissions. High production costs—currently two to five times those of conventional jet fuel—and limited feedstock availability have slowed widespread adoption.
The study identifies India as uniquely positioned to overcome these challenges through its rapidly expanding renewable energy sector and abundant agricultural biomass. It projects that India could build a $9 billion SAF export industry by 2030, growing to $30 billion by 2040 by scaling Power-and-Biomass-to-Liquids (PBtL) technology.
Unlike conventional biofuel production, PBtL combines crop residues such as straw, forestry waste and sawdust with renewable electricity and green hydrogen to produce sustainable jet fuel. Biomass is first converted into synthesis gas (syngas), after which green hydrogen is added before the mixture undergoes the Fischer-Tropsch process, producing liquid hydrocarbons that are fully compatible with existing aircraft and airport infrastructure.
Researchers say the addition of green hydrogen significantly improves fuel yields by converting much more of the carbon contained in agricultural waste into usable fuel. The process can produce roughly twice as much SAF from the same quantity of biomass compared with traditional Biomass-to-Liquids technology.
India's vast agricultural sector provides another major advantage. The study estimates that collecting just 4% of the country's surplus crop residue—much of which is currently burned in fields—could generate enough feedstock to meet around 25% of global SAF demand, while creating new income opportunities for rural communities.
India is also emerging as one of the world's lowest-cost producers of green hydrogen. Prices have fallen from $4.67 per kilogram in June 2025 to $3.23 per kilogram in February 2026, driven largely by inexpensive solar power. Costs are projected to fall below $3 per kilogram by 2030, further improving the economics of PBtL production.
Because the technology relies on agricultural and forestry waste rather than food crops, it avoids concerns over competition with food production. When paired with carbon capture and storage, PBtL could even achieve net-negative emissions by removing more carbon dioxide from the atmosphere than it releases throughout its lifecycle.
To support domestic production, India has introduced a policy mandating a 5% SAF blending requirement in aviation fuel by 2030, creating a guaranteed home market while positioning the country as a major exporter.
The government is also seeking to reduce the aviation sector's exposure to volatile fuel prices. Following sharp increases in Aviation Turbine Fuel (ATF) prices after the Iran conflict, New Delhi approved a 100 billion rupee (approximately $1.05 billion) ATF Price Stabilisation Fund. The initiative provides interest-free financing to state-owned oil marketing companies, helping cap domestic jet fuel prices at 115 rupees per litre and shielding airlines such as IndiGo and Air India from sudden price spikes.
Growing policy support is beginning to attract international investment. California-based Aemetis is exploring an initial public offering (IPO) for its Indian subsidiary, Universal Biofuels, to finance a dedicated SAF production facility capable of converting biodiesel into sustainable aviation fuel for domestic and international carriers.
Universal Biofuels already operates an 80-million-gallon-per-year biodiesel plant on India's east coast, supplying fuel to the country's three state-owned oil marketing companies. Aemetis has secured $3.8 billion in SAF supply agreements with major airlines, alongside a $3.2 billion renewable diesel supply contract, highlighting rising global demand for low-carbon aviation fuels.
