According to the International Air Transport Association (IATA), the aviation sector produces approximately 900 million tonnes of carbon dioxide (CO2) gas every year. At this rate, if immediate actions are not taken to combat this rise, it will result in emissions of more than 1.8 billion tonnes of carbon dioxide every year. Switching to Sustainable Aviation Fuel (SAF), as against the conventional jet fuels, is one of the key solutions to combat this problem.
WHAT IS SAF?
Sustainable Aviation Fuel (SAF) is an alternative aviation fuel, produced from renewable waste, feedstock, and sustainable raw materials. Usage of SAF against conventional jet fuels would result in a lifecycle carbon reduction of up to 80% carbon emissions. Feedstocks used for the production of SAF include municipal solid waste, used cooking oil, animal fats, or palm fatty acid distillate, etc. Currently, due to the high costs and limited availability of SAF, there has been some hesitation in its wider uptake.
THE SUSTAINABLE AVIATION FUEL OPPORTUNITY – AN INDIAN PERSPECTIVE
(a) Market Demand and Emission Reduction Goals
Market demand for air travel in India has rapidly grown in the past decade. Reduction of greenhouse gas (GHG) emissions in this sector is extremely important to meet India’s commitments to reduce GHG emissions in its Nationally Determined Contributions (NDC) under the Paris Agreement. It targets to reduce the emissions by 35% before 2030, in comparison to the emissions levels in 2005.
(b) Regulatory Framework
The Government of India (GOI) introduced the National Biofuel Policy (“Policy”) in 2018. The Policy aims to reduce import dependency in the oil and gas sector by promoting the usage of renewable biomass resources and wastes such as plastic and municipal solid wastes.
The goal of the Policy is to ensure the availability of biofuel in the market by promoting domestic feedstocks and its utilisation for production of biofuels. The Policy also encourages the application of advanced technologies for the generation of biofuels.
The Policy sets out ideas on how to use various feedstocks and renewable waste to produce alternative fuel. It also sets out ways to develop supply chains, potential sources of funding such as the Viability Gap Funding (VGF) for second-generation (2G) bioethanol refineries, and lays out the roles of the respective ministries to coordinate and encourage biofuel development in India.
(c) Definition and Types of Biofuels under the Policy
The Policy defines biofuels as fuels produced from renewable resources and used in place of, or in blend with, diesel, petrol or other fossil fuels for transport, stationary, portable and other applications. It further categorises biofuel into the following types:
- Bioethanol – refers to ethanol produced from biomass such as sugar-containing materials like sugar cane, sugar beet, sweet sorghum; starch-containing materials such as corn, cassava, rotten potatoes, agrofood / pulp industry waste, algae; and, cellulosic materials such as bagasse, wood waste, agricultural and forestry residues or other renewable resources like industrial waste, vegetable wastes, waste industrial off-gases, or any mixed combination of the above feedstock.
- Biodiesel – refers to a methyl or ethyl ester of fatty acids produced from non-edible vegetable oils, acid oil, used cooking oil, or animal fat and bio-oil.
- Advanced biofuels – refers to fuels (i) which are produced from lignocellulosic feedstocks (i.e., agricultural and forestry residues, e.g., rice and wheat straw/corn cobs and stover/bagasse, woody biomass), non-food energy crops (i.e. grasses, algae), animal dung or industrial waste and residue streams, or any mixed combination of above feedstock, and (ii) that have low CO2 emission or high GHG reduction, and (iii) do not compete with food crops for land use.
- Drop-in fuels – refers to any liquid fuel produced from biomass, agri-residues, wastes such as municipal solid waste, plastic wastes, industrial wastes etc., which meets Indian standards for motor spirit, high-speed diesel, and jet fuel, in pure or blended form, for use in vehicles without any modifications in the engine systems and the current petroleum distribution systems.
- Bio–CNG – refers to a purified form of biogas whose composition and energy potential is similar to that of fossil-based natural gas and is produced from agricultural residues, animal dung, food waste, municipal solid waste and sewage water.
SAF is a drop-in fuel which is produced from animal fats (biomass), wastes (used cooking oil) and agri-residues (palm fatty acid distillate), and is used as a jet fuel and requires no additional costs or infrastructure for its usage.
(d) Highlights of the Policy
- Increased scope of raw materials – To increase the domestic production of biofuel, the Policy has laid down a list of raw materials to be used for each type of biofuel. It has also listed the potential raw materials which can be used for the production of biofuels in the future.
- Creation of National Biomass Repository – A National Repository will be created to assess the availability of biomass in various parts of the country. The focus is on identifying surplus biomass areas in the country and the utilisation of such wastelands to produce biomass. The Policy also aims to explore the potential to generate 62 million metric ton (MMT) of municipal solid waste annually for the production of drop-in fuels.
- Encouraging village panchayats to plant feedstocks – Village panchayats and communities are encouraged to plant non – edible oil seeds bearing trees and short rotation crops such as sweet sorghum for additional feedstock across the country to increase the availability of domestically produced raw materials.
- Encouraging farmers to produce biomass – Farmers are encouraged to produce biomass as well as oil seeds on their marginal lands or to grow it as a second crop wherever only one crop can be grown due to rain-fed conditions.
- Reducing import dependence on methanol – Currently, India is a net importer of methanol. With a surplus of biomass, we can explore the production of bio-methanol and bio-butanol and their application in the Indian transport system.
- Increase in research and development (R&D) activities – Advanced technology is required for the development of advanced biofuels utilising domestic feedstock. Research and development activities will be undertaken in areas for developing new raw materials for biofuel production, plantations, processing, and conversion technologies.
- Setting up of National Biofuel Coordination Committee – To meet the requirement of the overall coordination and end to end implementation of the biofuels program, a National Biofuel Coordination Committee has been set up under the direction of the Ministry of Petroleum and Natural Gas.
The financial incentives to aid the manufacturing of biofuels under the Policy are as follows:
- Priority lending – Lending by financial institutions for the purposes of biodiesel extraction and production, as well as storage and distribution infrastructure for biofuels are prioritised.
- Foreign investment – Joint ventures and investments in the biofuel sector are encouraged along with 100% FDI in biofuel technologies, provided that the biofuel is produced domestically.
- Offtake guarantee – Assurances are to be given to 2G ethanol manufacturers (ethanol produced by other feedstock except for sugarcane) by public sector oil marketing companies to provide an assured market for private players for a period of 15 years.
- Fiscal incentives – Incentives such as VGF, subsidies, tax incentives, and grants for biofuels will be considered. A national biofuel fund is to be set up for providing financial incentives.
- Assistance from public banks – the National Bank for Agriculture and Rural Development and other public sector banks would be encouraged to provide financial assistance.
- Carbon credits – The opportunity to generate carbon credit for reducing CO2 emissions on account of biofuel feedstock generation will be explored.
(e) Export and Import of Biofuels
Export and import of biofuels in India are governed by the following laws:
- Foreign Trade Policy:
The Foreign Trade Policy of India 2015-2020, as extended up to 31 March 2023 (“FTP”), is the primary instrument governing imports and exports in India.
Under the FTP, biofuels are classified under entry 3826 (‘biodiesel and mixtures thereof’), containing less than 70% (by weight) of petroleum oils or oils obtained from bituminous minerals when being imported by the Indian party of the Indian Trade Classification (Harmonised System) Code (“ITC(HS)”).
However, in accordance with the FTP, import of items under heading 3826 are restricted. The FTP prescribes that in case of restrictions, import is permitted only upon receipt of authorisation from the Directorate General of Foreign Trade (“DGFT”). To get the authorisation from the DGFT, an application would need to be submitted by the importer in Form ANF 2M (‘Application form for import of restricted items’). At present, this can be submitted to the import management system (IMS) on the DGFT website.
Similar to imports, the ITC(HS) Code for exports is 3826. Export is restricted with the condition of procurement of a license from the DGFT for non-fuel purposes only. The license is granted for a period of 12 months. The application can be submitted in Form ANF 2N (‘Application form for export licence for restricted items’) by the exporter on the export management system (EMS) on the DGFT website.
- National Biofuel Policy 2018:
The Policy encourages the utilisation of domestic feedstock for the production of biofuel and provides that the import of biofuels will not be allowed on the assumption that such import would hinder the market for indigenously manufactured biofuels. However, the import of feedstock for the production of biodiesel would be permitted on an ‘as needed’ basis.
The export of biofuels would not be allowed except in cases where the domestic production of biofuels is sufficient, or the pricing of biofuels has become so high that it has led to a reduction in domestic sales, or in cases of calamities such as COVID or medical emergencies.
(f) National Green Aviation Policy
A white paper on the National Green Aviation Policy was released by the Ministry of Civil Aviation (“MCA”) in 2019 to foster inclusive and sustainable growth of the civil aviation sector in India while limiting the environmental footprints. Additionally, the white paper suggested the use of biofuels in the aviation industry and guides all aviation stakeholders to explore the possibilities of the use of biofuel and other alternative fuels with lower emissions for ground vehicle application. However, there has been no further development on this front and the MCA is yet to roll out a consolidated framework for the introduction of sustainable aviation fuels/biofuels in the Indian aviation industry.
CERTIFICATIONS AND STANDARDS
On account of SAF being a relatively new commodity in the Indian market, there is no regulatory framework in place for it yet. However, SAF, being an aviation fuel, needs to meet a certain set criteria and specifications, similar to those met by the conventional jet fuels, for it to be a substitute fuel.
In India, certifications in the aviation industry are predominantly regulated by the following authorities:
- Centre for Military Airworthiness and Certification (CEMILAC) – CEMILAC, under the authority of the Defense Research and Development Organization (DRDO), certifies the airworthiness of military aircraft, helicopters, aero-engines, etc.
- Directorate General of Civil Aviation (DGCA) – The DGCA is responsible for certifying civil aircrafts.
(b) International Standards
To combat climate change, the aviation industry has collectively come to an agreement under the framework of the Air Transport Action Group (ATAG). Given below are some of the global developments and initiatives taken for the reduction of carbon emissions and promotion of SAF:
- The International Civil Aviation Organization (ICAO): the ICAO has a technical advisory board that gives certification on the basis of sustainability and technical criteria, and certifies SAF approved by the American Society for Testing Materials (“ASTM”).
- ASTM standards: Jet fuels need be compliant with standard number D1655 and DEF STAN 91-91 issued by ASTM to ensure that it is fit for operational use. The ASTM sets requirements for the criteria such as composition, volatility, fluidity, combustion, corrosion, thermal stability, contaminants, and additives, among others to ensure that the fuel is compatible when blended.
- United Nations Framework Convention on Climate Change (UNFCCC) – It is an entity tasked with dealing with climate change to which India is a party. India has committed to achieving a 50% non-fossil capacity target by 2030.
- Sustainable Aviation Fuel User Group (SAFUG) – It was formed in 2008 under the ICAO and has gathered 25 member airlines and 5 affiliate organisations. SAFUG aims to develop a world-leading fact base on sustainable alternative fuels to provide best practices for supporting the practical application of common sustainability criteria for the implementation of SAFs. It intends to support the development of government policies which promote the development, certification, and commercial use of sustainable, lower-carbon aviation fuels.
- Roundtable on Sustainable Biomaterials (RSB) – It is a global membership organisation that drives the just and sustainable transition to a bio-based and circular economy. The members include the global community of businesses, NGOs, academics, government and UN organisations. RSB has a certification scheme to encourage the sustainable production of biofuels and other biomaterials.
- IATA Aviation Energy Forum (AEF) – the AEF is a premier industry meeting for the world’s aviation fuel community. The IATA AEF is a merger of the Fuel Forum and the SAF Symposium which was held in New Delhi on 15 – 17 November 2022. It covered key topics such as Commercial and Technical Fuel, as well as SAF and other energy options. It was attended by key IATA members and other strategic partners.
- Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) – CORSIA is a global scheme for offsetting CO2 emissions against the 2020 levels, adopted by the ICAO in 2018 for international flights. Even though these standards are presently not followed in India, a Global Market Based Measure (GMBM) Scheme has been adopted by the ICAO to address the carbon emissions from international civil aviation. As India is a member of the ICAO’s governing council responsible for implementing policies and rules, we expect India to adopt this scheme soon enough.
The measures taken towards implementation of CORSIA in India so far are as follows:
- The DGCA has issued Civil Aviation Requirements on CORSIA after a consultation with the stakeholders.
- The DGCA has issued guidance material for airline operators and other stakeholders for better understanding of the design elements of CORSIA.
- The DGCA, in association with the IATA and the European Aviation Safety Agency, has carried out various workshops and seminars/trainings for the industry to sensitize them on the CORSIA requirements.
- The DGCA has worked in close coordination with the National Accreditation Board for Certification Bodies (NABCB) to empanel two verification bodies to carry out verification activities with respect to CORSIA for the airlines.
For Indian operators, CORSIA offsetting requirements will be applicable from 2027. India filed its reservations at the 40th ICAO Assembly in 2019 regarding the current structure of CORSIA.
Under CORSIA, any SAF or CORSIA-eligible fuel (CEF) needs to meet the sustainability criteria set by the ICAO. Additionally, SAF (CEF) producers must be approved under the Sustainability Certification Scheme of the ICAO. Once approved as CORSIA-eligible, use of SAF can be counted towards CORSIA. The DGCA can guide SAF producers through the entire process of the ICAO. However, the DGCA currently does not have a domestic certification process for SAF or other drop-in-fuels.
If a SAF producer requires certification for a fuel for a test flight, the fuel will have to meet the Bureau of Indian Standard IS 17081:2019 Aviation Turbine Fuel (Kerosene Type, Jet A-1). Subsequently, the producer will also require approvals from the DGCA.
Aviation industry players have realised the need for the adoption of sustainable fuels in the aviation sector. With the need to offset carbon emissions, several companies have started producing SAF as an alternative to jet fuel. Some of the developments in this space are provided below:
- In August 2018, SpiceJet operated the first flight using SAF, with a blend of 75% aviation turbine fuel and 25% bio-jet fuel made from Jatropha plants.
- The Indian Air Force has also recently used SAF in their aircrafts.
- Indigo has partnered with the Council of Scientific and Industrial Research (CSIR) and the Indian Institute of Petroleum (IIP) to produce and deploy SAF. It has also taken delivery of its first SAF-operated aircraft from Airbus, and the Toulouse-Delhi flight undertaken using this aircraft made it the first international flight to be operated by any Indian carrier using SAF.
- Aviation industry players such as Air India, AirAsia India and Vistara have signed an MoU with CSIR-IIP to collaborate on the research and development of SAF.
- Airport operators Groupe ADP and GMR Airports, together with Airbus, Axens and Safran, have also signed an MoU to make India aviation future ready.
- SpiceJet and the GMR group are partnering with Boeing and certain French companies respectively to explore opportunities for the development and use of sustainable aviation fuel.
- Neste, a market leader in production of renewable fuels, has partnered with major US airlines – Alaska Airlines, American Airlines and JetBlue Airways, along with Japan’s largest airline All Nippon Airways – for the supply of SAF.
- World Energy has partnered with United Airlines of the US and launched its first 100% SAF commercial flight in 2021.
SAF can be used to reduce carbon emissions as it not only uses sustainable raw materials for the production of biofuel but also ensures that the carbon lifecycle emissions are significantly reduced (up to 80% in some cases). SAF would also reduce our dependency on the import of crude oil which is subject to constant fluctuations.
However, the law regarding SAF is not unambiguous. To promote the manufacturing of SAF, the Policy needs to include SAF under the definition of ‘biofuels’, thereby, extending the producer incentives and risk diversification to SAF manufacturers as well. Additionally, SAF boards must be established in various states to ensure state governments’ support for infrastructure and fiscal incentives, as stated under the Policy.
Further, the pricing of SAF must be competitive since it is currently two to four times more expensive than the conventional jet fuel. There is also a shortage of production of the SAF due to the limited availability of raw materials. However, India is potentially considered to have a large market for SAF as there is an estimated generation of 62 MMT of municipal solid waste annually which can be used as feedstocks.
It is imperative to establish a proper roadmap for the usage of SAF as it will ensure the growth of the SAF market in India, and would also aid India’s commitment towards net zero carbon emissions by 2070.
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