India senses an opportunity in ethanol based sustainable aviation fuel production

With India announcing indicative blending targets of Sustainable Aviation Fuel (SAF) in Aviation Turbine Fuel (ATF) for international flights from 2027 onwards, domestic bio-fuel industry is sensing an opportunity where India can emerge as a global player in eco-friendly aviation fuel supply in the coming years.

The blending target fixed by the government for SAF is 1%, 2% and 5% for 2027, 2028 and 2030, respectively. The industry’s optimism stems from the fact that the recent International Civil Aviation Organisation (ICAO) SAF Report, launched in collaboration with Ministry of Civil Aviation, considers production of SAF through the Alcohol-to-Jet (ATJ) process as the largest opportunity for India.

Incidentally, production of SAF through ATJ process is not a time tested technology. The first plant which uses this technology has just come up in Atlanta, US.  If Indian bio-energy companies can build capacities and capability to use ethanol to produce SAF to be blended with aviation fuel, the country could be an early player in this segment.

India can produce 150 cr litre sugarcane SAF by 2030

Indian Sugar and Bio-Energy Manufacturers Association (ISMA) estimates India has the potential to produce 125-150 crore litre of  sugarcane driven SAF by 2030 without affecting ethanol demand for petrol blending and alternative use cases. CORSIA Blending Targets (2030) as well as Global CORSIA Export Market (5%) can itself generate a demand for 150 crore litres by 2030, the industry body says.

Sameer Sinha, CEO, Sugar Business, Triveni Engineering and Industries Ltd agrees. According to him, if SAF happens, India has a very significant potential to emerge as an export hub as CORSIA blending targets will see demand for SAF increase globally and ethanol based SAF can be the cleanest option with demand coming from aviation hubs like Singapore in India’s East Coast and Dubai in the West Coast.

“India has a surplus of ethanol. The feedstock is already available, and Indian ethanol, compared to that of Brazil has less carbon intensity. Which means the cleaning of the environment is larger if I use the Indian ethanol versus the Brazilian ethanol. India is already exporting refined petroleum products to many countries, and SAF can be an addition. So India has multiple advantages”, he says.

Ethanol SAF manufacturing units cannot come up overnight

However, ethanol based SAF manufacturing facilities cannot come up overnight. Experts say it takes at least three and a half years to set up a green field facility running. Even if Indian companies invest in SAF today, the production will begin only when India’s annual SAF blending target reaches near 5%. That’s the time when volume demand will rise, ISMA says.

Sinha says government policy can play a major role in making SAF an attractive investment option for the industry. He expects government to assure 100% off take in the initial years, and also an administered pricing structure for SAF. A policy regime similar to what help ethanol blending in petrol in the country can help, he feels. “We have been engaged with the government and we believe the government is working on a policy and the policy should be out before the end of the financial year. That is our hope and expectation”, he said.

The SAF blending plan for 2027 will not be driven by ethanol based SAF. It will be based on used cooking oil (UCO). Indian Oil Corporation Limited had became the first Indian company to receive ISCC CORSIA certification for SAF production at its Panipat Refinery, followed by the signing of an MoU between IOCL and Air India for SAF supply last year. The alcohol based SAF will take over only when the demand surge happens after the initial phase. In that sense, 2030 seems to be a good target.