Industry
India policy on SAF mandate not effective: IATA
Summary
- Sustainable aviation fuel is any fuel that has similar properties to conventional jet fuel but generates lower carbon emissions. In India, the government is considering mandating airlines to use blended sustainable aviation fuel by 2025
New Delhi: The Indian government’s policy on making use of sustainable aviation fuel (SAF) mandatory for airlines may not be as effective and can lead to higher prices due to limited production, Willie Walsh, director general, International Air Transport Association, said on Monday.
"The US approach to SAF is the most advanced with a system of tax credits to drive up production levels. This will be more effective than purchase mandates being considered as far and wide as Singapore, India and Europe. When there is not enough supply, a purchase mandate will drive prices up, stall innovation and limit competition long before supply increases," Walsh said while addressing the annual general meeting of IATA at Istanbul.
In the US, producers of sustainable aviation fuel or green fuel are eligible for a tax credit of $1.25 per gallon. The qualifying green fuel must reduce greenhouse gas emissions by 50%. If the green fuel helps cut greenhouse gas emissions by more than 50%, then it is eligible for an additional $0.01 per gallon for each percent the reduction exceeds 50%, up to $0.50 per gallon.
Sustainable aviation fuel is any fuel that has similar properties to conventional jet fuel but generates lower carbon emissions.
In India, the government is considering issuing a directive mandating airlines to use blended sustainable aviation fuel (SAF) by 2025.
“We have put together an advisory saying we will look at 1% blending of sustainable aviation fuel by 2025, 2% by 2026, and 5% by 2030," civil aviation minister Jyotiraditya Scindia had told Mint in April.
The civil aviation ministry has also proposed that Indian airlines participate in a joint venture to produce green fuel. The ministry has asked the carriers whether they would be willing to hold a 25% stake in the joint venture.
In India, the concept of sustainable aviation fuel is still developing and airlines are experimenting with green fuel by operating demonstration flights. In May, AirAsia India operated a domestic commercial passenger flight from Pune to New Delhi using a 1% blend of indigenous sustainable aviation fuel. Similarly, SpiceJet, IndiGo, Air India and Vistara have also taken steps towards sustainable fuel-powered flights and a sustainability framework.
“By 2025, if we target to blend 1% SAF blending in Jet fuel, India would require around 14 crore litres of SAF per annum. More ambitiously, if we target for 5% SAF blend, India requires around 70 crore litre of SAF per annum," Union petroleum minister Hardeep Singh Puri had said in April.
As per IATA, the current production of green fuel is less than 0.1% of is needed to achieve net zero carbon emissions.
"But the trend is positive. In 2022, SAF production tripled to 300 million liters. With the right supportive policies, reaching 30 billion liters by 2030 is challenging but achievable. That would be about 6% of the 450 billion liters annual production capacity we need in 2050," Walsh said.
He added that the stakeholders need to address the problem of insufficient production capacity to meet the demand for green fuel by increasing the number of pathways for SAF production and diversify feedstocks.
"And if there is an early policy decision that is needed, it is to establish global standards for a SAF book and claim system that can fairly allocate SAF credits with no double counting. It will help facilitate economies of scale in SAF production. And it will avoid the long-distance shipping (or even importation) of SAF, which would only degrade its climate credentials," Walsh said.
