India has the potential to produce sustainable aviation fuel (SAF) at costs up to 40 per cent below global benchmarks, according to a joint study by the IECC at UC Berkeley and Energy Innovation, released in July 2025. The findings position India as a future powerhouse in clean aviation fuel, leveraging its rapidly expanding renewable energy infrastructure and vast agricultural residue base.

A Multibillion-Dollar Export Opportunity

According to the study, India could convert its current crude oil import vulnerabilities into a major export industry by scaling Power-and-Biomass-to-Liquids (PBtL) technology. Researchers project this could become a $9 billion export opportunity by 2030, rising to $30 billion by 2040. This comes amid growing global airline demand for low-carbon fuels as international aviation bodies tighten emissions standards.

Crop Residue: The Unlikely Feedstock

India produces vast quantities of surplus crop residue annually — material that farmers traditionally burn in the fields, contributing to severe seasonal air pollution. The study notes that collecting just 4 per cent of this residue would be sufficient to produce 25 per cent of global SAF requirements. Crucially, because the process relies on crop residues and forestry waste rather than food crops, it sidesteps one of the most persistent criticisms of conventional biofuels — competition with food supply chains.

When combined with carbon capture and storage (CCS) technology, the PBtL process can reportedly achieve negative lifecycle emissions — removing more carbon dioxide from the atmosphere than it emits. This makes it a candidate for meeting the most stringent carbon accounting standards in aviation.

India's Policy Framework and Domestic Market

The Indian government has set a policy mandate targeting a 5 per cent SAF blending requirement in jet fuel by 2030, establishing a ready and regulated domestic market that complements the country's global export ambitions. The blending mandate also serves a strategic purpose: reducing India's long-term exposure to volatile international jet fuel prices, which have historically strained aviation sector economics.

Investment Activity and Industry Players

India's improving production economics and supportive policy environment are beginning to attract serious capital. California-based Aemetis is reportedly exploring an initial public offering (IPO) for its Universal Biofuels subsidiary in India, with proceeds earmarked to fund a dedicated SAF plant and expand its capacity to convert biodiesel into SAF for domestic and international airlines.

Universal Biofuels already operates an 80-million-gallon-per-year production facility on India's east coast, supplying tens of millions of litres of biodiesel to the country's three state-owned oil marketing companies (OMCs). Aemetis currently holds $3.8 billion worth of SAF supply contracts with major airlines, alongside a $3.2 billion renewable diesel supply agreement, according to the study.

What Comes Next

With the 2030 blending deadline approaching and global airline majors under growing pressure to decarbonise, India's cost advantage in SAF production could prove decisive. The scale-up of PBtL infrastructure, combined with rural income generation from residue collection, may also give the initiative cross-sectoral political support — a factor that has historically helped sustain Indian energy transitions.