Indian aviation’s sustainability crisis: Who will pay for flying green?

India, now the world’s third-largest aviation market, is responsible for 2.5% of global emissions but contributes just about 1% of national carbon emissions—below the global average. Yet, this relatively benign share masks a fast-growing challenge. With air travel demand projected to grow exponentially, emissions are set to rise in tandem.

Ajay Singh, chairman and managing director of SpiceJet, put it bluntly at a panel discussion hosted by MakeMyTrip Foundation's India Travel and Tourism Sustainability Conclave 2025: “Sustainability clearly was not on [the airlines’] minds” during the COVID-19 pandemic, when survival was paramount. But as recovery takes hold, Singh adds, “Sustainability will again be front and centre... but it has to make economic sense.” The cost of sustainable aviation fuel (SAF), which is 2.5 times the cost of conventional fuel, is simply unaffordable for most carriers. “You can’t pass that on to consumers... they will not pay that kind of money,” says Singh.

Experts at the panel also feared that with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) set to become mandatory in 2027, airlines will face additional cost burdens if SAF production doesn’t ramp up. Yet, there is no mature carbon offset market in India today. “We’re doing nothing,” Aditya Ghosh, co-founder of Akasa Air admitted candidly while other panellists agreed. “And we’re just two years away from CORSIA kicking in.”

CORSIA is a global initiative led by the UN’s International Civil Aviation Organisation (ICAO). Starting in 2027, it enters a mandatory phase for most major aviation nations. Under the scheme, airlines will need to offset any carbon emissions that go beyond their 2020 levels by buying approved carbon credits.

“CORSIA has set impossible targets. It tries to limit countries to the emission levels of the number of aircraft that they had in 2020. That has to be opposed,” said Singh. 

“The 2027 CORSIA targets are unrealistic and unfair for countries like India. We will continue to work with ICAO and see that these norms are not unfair to developing countries and not biased towards developed countries,” he added.

In tune, Aloke Singh, managing director of Air India Express, said that CORSIA will pose a significant burden on airlines. “If the SAF production gets further delayed, the burdens of carbon offset, due to CORSIA, will rise further.”

CAPA’s CEO Kapil Kaul, who moderated the session, opined that given that none of the Indian carriers are ready to meet the targets set under CORSIA, it’s possible the target could be deferred.

Where SAF Stands

SAF has emerged as the only viable short-term lever for reducing aviation emissions. The good news is that India has shown technical capability. SpiceJet, for instance, flew India’s first SAF-powered flight in 2018—from Dehradun to Delhi—using fuel made in a laboratory at the Indian Institute of Petroleum. “The engines don’t need to be modified. It works just really well,” Singh emphasised.

But the barriers to commercial scaling are immense. Current SAF production is just 0.53% of total fuel consumption globally, and even in Europe—the leader in SAF adoption—KLM and Air France clock just 0.84% and 0.42% respectively. According to CAPA India’s internal assessment, the world is more than 5 million tonnes short annually of the SAF needed to hit 2030 targets.

Ghosh argued that India actually has a unique opportunity: “India now has about 160 million tonnes of feedstock... which can be used for SAF production. Ironically, we have a chance to become a net SAF exporter.” But for that to happen, “you have to identify the feedstock, build manufacturing, logistics and treat this as an export-focused sector.”

The challenge, then, is not technical feasibility but economic and logistical scale. Singh noted that the cost of building even one SAF unit—like the pilot project at Panipat with IOCL—was just ₹150 crore. “These are not large sums of money,” he said, “but the political will is missing.” According to Ghosh, government support in the form of viability gap funding could kickstart production, just as it did for electric bus infrastructure in India.

Targets and the Reality Check

India’s SAF blending target—1% by 2025, increasing to 2% by 2027 and 5% by 2030—is far too modest, the panellists unanimously agreed. “If airlines are committing to net-zero by 2050, policymakers have to take sharper targets,” said Singh of Air India Express. He added, “The sum of money required isn’t humongous. Just let them blend more.”

Yet, scaling SAF isn't only about blending targets. There's also a technological bottleneck. Of the 13 ASTM-approved pathways for SAF production, only a few have been commercialised. “80% of SAF facilities globally are using hydrotreatment technology,” pointed out Kaul. “Other technologies are not getting clearances or are still in the research phase.”

Economics Over Environment

One of the core dilemmas underscored was that while sustainability measures tend to align with cost savings in areas like engine efficiency and operational performance, they become a burden when it comes to SAF.

“There’s no free lunch,” said Singh of Air India Express. “If we don’t pay as industry, the taxpayer will pay. If the consumer doesn’t pay, someone has to pay.” Today, sustainable alternatives drive up costs rather than bringing them down, which reverses the economics that previously spurred efficiency in aviation.

The industry is currently relying on gradual efficiency gains—about 2 to 2.5% annually over the last few decades—through better engines, newer aircraft, and improved operational techniques. “Per passenger emissions have halved since I joined the industry,” shared Singh, “and that was when sustainability wasn’t even a buzzword—it was driven purely by economics.”

Small Gains Matter, But Are They Enough?

Several small but significant practices—like continuous descent operations, better climb optimisation (OptiClimb), single-engine taxiing, and cleaner aircraft surfaces—offer immediate gains. According to Air India Express’ internal estimates, about 30 such initiatives can improve efficiency by 4-5%. But implementation remains erratic.

“There’s been talk of continuous descent and shorter air routes for years,” Kaul pointed out. “Yet Delhi-Bombay block time is now 2 hours 10 minutes, and congestion is only increasing.” The larger question, he added, is “Who takes leadership and who takes ownership?”

The answer, the panel seemed to agree, lies at the highest levels of government. “Flexible use of airspace is possible. Better routing is possible. But unless the top political leadership is sensitised, it won’t happen,” Singh asserted.

Even if airlines adopt best practices and strive for fleet modernisation, without meaningful SAF production or an offset market, the industry will struggle to comply with global frameworks.

What the Future Looks Like

Despite the odds, there are reasons for cautious optimism. Indian carriers are already investing heavily in next-gen aircraft. “In five years, we will be flying the youngest fleet in the sky,” Ghosh said. “Which basically means, by math, we will be emitting the least.”

Air India Express, for example, moved from just 10% of its fleet being new-gen aircraft to 50% in a year. “By next year, two-thirds will be new-gen,” confirmed Singh. But he also noted that sustainability should not be limited to fuel and emissions—it must encompass water, circular economy practices, and broader social impact.

The panel agreed that while the airline industry can and should do more, it cannot go it alone. As Singh summarised, “You cannot expect airlines to bear an additional 15-20% cost to make this happen. For petroleum companies, it’s marginal. For us, it’s existential.” To meet net-zero targets, experts feel India needs to treat aviation sustainability as a national priority, not just an airline issue.