India’s leading oil marketing companies (OMCs) have formally petitioned the government for targeted financial incentives to accelerate the production and distribution of Sustainable Aviation Fuel (SAF). As global geopolitical tensions threaten traditional fuel supply chains, industry leaders are pressing for policy support to ensure that the transition to greener aviation alternatives remains on schedule without compromising economic feasibility.
The Context of Aviation Decarbonization
The aviation sector is under increasing pressure to reduce its carbon footprint, which currently accounts for approximately 2-3% of global CO2 emissions. SAF, derived from renewable resources such as agricultural waste, used cooking oil, and municipal solid waste, is viewed as the primary solution to decarbonize long-haul flights where electrification remains technologically unfeasible.
Despite its environmental benefits, SAF currently costs significantly more to produce than conventional Jet A-1 fuel. Without government intervention in the form of tax credits, production subsidies, or mandates, OMCs argue that the high price premium will stifle adoption among airlines already operating on thin profit margins.
Addressing Supply Chain Resilience
The urgency behind this push is exacerbated by ongoing volatility in global oil markets. Industry analysts suggest that domestic production of SAF is not merely an environmental goal but a strategic imperative for energy security.
By localizing the SAF supply chain, OMCs aim to mitigate the risks associated with imported crude oil. Government officials are currently evaluating proposals that include viability gap funding to bridge the price differential between SAF and fossil-based jet fuel.
Expert Perspectives on Market Viability
Industry experts emphasize that infrastructure readiness is a critical hurdle.
