India proposes ban on corn, soybeans and palm oil as aviation fuel feedstocks

India is considering a ban on the use of food crops, including corn, soybeans and palm oil, as feedstocks for sustainable aviation fuel (SAF) production. The proposed restrictions are included in a draft government policy reviewed by S&P Global Energy. The main objective is to prevent competition between aviation fuel production and the food sector, which could lead to higher food prices. The draft also proposes excluding feedstocks linked to deforestation, biodiversity loss or the use of unauthorized genetically modified organisms.

Unlike India’s ethanol production program, which relies heavily on corn and surplus rice, the new policy prioritizes alternative feedstocks. These include used cooking oil, animal fats and agricultural residues. However, cane molasses, cane syrup and surplus sugar would still be permitted for alcohol-to-jet fuel production. The origin of each feedstock batch would be verified using geolocation data and satellite monitoring.

To encourage investment in SAF production, the Indian government proposes introducing a fixed procurement price system similar to its ethanol program. The Ministry of Petroleum and Natural Gas would set prices annually or every six months based on production costs plus a guaranteed profit margin. Different pricing levels would apply to individual production technologies, while oil marketing companies could receive government subsidies to cover the difference between procurement prices and market-linked prices. The draft does not yet specify actual price levels or guaranteed profit margins.

The document also maintains the proposed mandatory SAF blending targets for international flights: 1% in 2027, 2% in 2028 and 5% by 2030. The SAF share could increase to 7.5% by 2035. To support the development of production infrastructure, the government proposes financial assistance covering up to 30% of capital expenditure for new plants. Particular attention is also given to upgrading existing biofuel facilities and using refinery capacity to produce aviation fuel from renewable feedstocks.

According to estimates cited in the draft, India has more than 750 mln tons of biomass available annually, including approximately 230 mln tons of surplus agricultural residues, which could provide a significant feedstock base for SAF production. Potential sustainable aviation fuel output is estimated at 8–10 mln tons per year by 2040, requiring investment of $70–85 bln. However, the proposed rules remain at the draft stage, meaning the final provisions on feedstock eligibility, government support and mandatory fuel blending could still change.

Tags: India, palm oil, sustainable aviation fuel, corn, soybean, oilseeds