UP Rolls Out India’s 1st Sustainable Aviation Fuel (SAF) Policy, Eyes ₹3,000 Cr Investment

Uttar Pradesh is making a bold move with its Sustainable Aviation Fuel (SAF) Manufacturing Promotion Policy-2025, the first of its kind in India. This initiative aims to convert agricultural waste-like sugarcane bagasse, rice husk, and wheat straw-into bio-jet fuel, creating new revenue streams for farmers while advancing India's green aviation goals.

The policy is expected to attract ₹3,000 crore in investments, with over 18 companies expressing interest in setting up SAF production units in the state. It also offers capital subsidies, state GST reimbursements, land waivers, and interest subsidies to incentivize industry participation.

The policy offers capital subsidies, GST reimbursements, and land waivers to attract private players.

Beyond economic benefits, this policy aligns with India's climate commitments, helping reduce carbon emissions and promoting energy security. With Uttar Pradesh's strong logistics infrastructure, including five international airports, the state is positioning itself as a hub for SAF production.

This could be a game-changer for India's aviation sector.

India's Sustainable Aviation Fuel (SAF) policy is ambitious, but it differs from global approaches in key ways. While India leverages agricultural waste like sugarcane bagasse and rice husk, making it cost-effective and farmer-friendly, The EU and UK have blending mandates requiring airlines to use SAF, but these have led to high costs due to supply chain inefficiencies.

The International Air Transport Association (IATA) warns that SAF production is too low globally, covering just 0.7% of airline fuel needs. India accounts for ~2.5% of global aviation fuel demand, with significant room for SAF expansion.

While India focuses on bio-based SAF, global efforts also explore hydrogen fuel and electric aircraft, though these technologies are still in early stages.

India's SAF policy is incentive-driven, aiming to build a domestic SAF industry before enforcing mandates. In contrast, Europe has strict SAF blending rules, but high costs have slowed adoption. Meanwhile, global aviation bodies like IATA push for policy reforms to make SAF more accessible.