India's Potential to Dominate the Sustainable Aviation Fuel Market: A Comprehensive Analysis
The aviation industry is undergoing a significant transformation, with a growing emphasis on sustainability and reducing its carbon footprint. Sustainable Aviation Fuel (SAF) is at the forefront of this shift, and India is poised to become a major player in this market. In this article, I will delve into the factors that make India a prime candidate to dominate the SAF market, and explore the potential implications for the industry and the environment.
The current state of SAF production is concerning. According to the International Air Transport Association (IATA), SAF production represents only 0.6% of total jet fuel consumption, far below the 65% target set by the global aviation industry to reach net-zero carbon emissions by 2050. The high cost of SAF, which is two to five times more expensive than conventional jet fuels, is a significant barrier to its adoption. Additionally, the lack of global refining capacity and raw materials, such as cooking oil and animal fats, is hindering the scale-up of SAF production.
However, a new report has revealed that India is uniquely positioned to produce SAF at a significantly lower cost than global benchmarks. The report, conducted by the IECC at UC Berkeley and Energy Innovation, found that India can produce SAF at costs up to 40% below global benchmarks, thanks to the country's booming renewable energy sector. This is particularly fascinating, as it presents an opportunity for India to transform its crude oil import vulnerabilities into a multibillion-dollar export industry.
One of the key factors driving India's potential dominance in the SAF market is its vast production of surplus crop residue. India produces vast amounts of crop residue, which is traditionally burned by farmers. By collecting just 4% of this residue, India could produce enough SAF to supply 25% of global SAF requirements, while also creating direct income streams for rural communities. This is a win-win situation, as it not only reduces the need for crude oil imports but also provides a sustainable source of income for farmers.
Another factor that makes India a prime candidate to dominate the SAF market is its production of green hydrogen. India is currently producing some of the world's cheapest green hydrogen, with prices falling from $4.67/kg in June 2025 to $3.23/kg in February 2026. This is mainly driven by an abundance of cheap solar power, which is enabling India to produce green hydrogen at a significantly lower cost than other countries. The addition of green hydrogen to the Power-and-Biomass-to-Liquids (PBtL) process is a game-changer, as it fundamentally changes the economics of biomass-based SAF production.
The PBtL process combines agricultural waste with renewable electricity and green hydrogen to produce SAF. This process is significantly more efficient than conventional Biomass-to-Liquids (BtL) processes, which discard much of the carbon contained in agricultural waste during conversion. By using green hydrogen, the PBtL process can convert far more of the carbon into liquid fuel, allowing roughly twice as much SAF to be produced from the same amount of biomass. This is a major breakthrough, as it enables India to produce SAF at a significantly lower cost than global benchmarks.
One of the most intriguing aspects of the PBtL process is that it avoids one of the biggest criticisms of conventional biofuels. By using crop residues and forestry waste rather than food crops, the PBtL process ensures that it does not compete with food production. Additionally, when combined with carbon capture and storage, the PBtL process can even remove more carbon dioxide from the atmosphere than it emits over its lifecycle. This is a significant development, as it presents an opportunity for India to become a leader in sustainable aviation fuel production.
India's investment in SAF is also intended to reduce its long-term exposure to volatile jet fuel markets. Following the surge in Aviation Turbine Fuel (ATF) prices after the outbreak of the Iran war, New Delhi approved a 100 billion rupee ATF Price Stabilization Fund. This program provides interest-free financing to state-owned oil marketing companies, allowing domestic jet fuel prices to be capped at 115 rupees per liter and helping shield airlines such as IndiGo and Air India from sharp fuel price swings. This is a smart move, as it ensures that India's aviation industry is not exposed to the volatility of global jet fuel markets.
In conclusion, India is poised to become a major player in the sustainable aviation fuel market. Its vast production of surplus crop residue, combined with its production of green hydrogen and the PBtL process, presents a unique opportunity for India to produce SAF at a significantly lower cost than global benchmarks. Additionally, India's investment in SAF is intended to reduce its long-term exposure to volatile jet fuel markets. As the aviation industry continues to shift towards sustainability, India is well-positioned to take advantage of this opportunity and become a leader in the SAF market. Personally, I think that India's dominance in the SAF market is not only possible but also highly likely, and it presents an exciting opportunity for the country and the world.
