The global aviation industry is confronting a defining paradox - reconciling unprecedented growth in air travel with the urgent imperative of climate action. With aviation responsible for nearly 2.5 per cent of global CO₂ emissions and passenger volumes continuing to rise, decarbonisation has become central to the sector’s long-term viability. Within this context, Sustainable Aviation Fuel (SAF) has emerged as the most practical, immediate, and scalable solution. SAF not only delivers substantial lifecycle carbon reductions, but also integrates seamlessly into existing aircraft engines, fuel supply chains, and airport infrastructure, thus enabling transition without disruption.

      For India, this transition represents both an imperative and an opportunity. It is one of the fastest growing aviation markets in the world crossing ~239 million passengers in FY 2024-25, and on the path to become the third largest. Fleet expansions by leading carriers, supported by record aircraft orders exceeding 1,500, reflect confidence in India’s long-term economic fundamentals. Further, the firm order for widebody aircraft illustrates a new phase of ambition to connect to long-haul international markets. The progress achieved in India’s aviation sector is a direct outcome of deliberate policy foresight and sustained institutional commitment. This expansion has already pushed ATF consumption from 6.3 MMTPA in FY2015-16 to 8.98 MMTPA in FY2024-25, with volumes expected to more than double by 2040. Despite newer, more fuel-efficient aircraft, every capacity addition increases fuel demand, intensifying environmental pressures.

      India faces rising fuel demand but also possesses the assets to lead - abundant feedstock, deep refining capacity, proven bioenergy experience, and a strong policy focus on energy transition. The resources, infrastructure, and policy intent are already in place. The real challenge and the strategic opportunity lies in orchestrating them into an integrated value chain that translates potential into measurable climate and competitiveness gains. The development of a domestic SAF industry can deliver multiple dividends: reduced crude import dependence, enhanced rural income, new technology value chains, and green job creation.

      The transition to SAF is more than a technological shift, it is a test of strategic intent. India stands at the threshold of redefining its aviation sector not merely as a consumer of cleaner fuel, but as a producer, innovator, and global supplier of it. India’s airlines, airports, regulators, and innovators together represent a confident ecosystem ready to shape the next phase of green aviation. By aligning policy ambition with industrial execution, and pairing domestic feedstock strength with global collaboration, India can chart a flight path where economic growth and climate responsibility move in tandem. As India advances towards Viksit Bharat 2047, its leadership across the aviation value chain from connectivity to manufacturing, from sustainability to digital innovation will define it as a dominant and responsible player in global aviation.

      Realising India’s potential as a global hub for SAF will require a holistic systems-level approach - one that integrates strategic policy design, innovative business models, and coordinated industry action.


      Key highlights of the report:

      • Booming aviation market

        India’s aviation market crossed 239 million passengers in FY 2024-25 and is on the path to become world’s third largest, driven by infrastructure development, regional connectivity, safety oversight, and economic regulation under a cohesive framework

      • Massive demand potential for SAF

        To meet CORSIA’s mandatory targets and avoid offsetting costs, India must produce 53 million litres of SAF by 2027 and 290 million litres by 2030 for international flights. However, achieving the broader blending ambition across the overall aviation ATF demand would require SAF production of around 720 million litres by 2030, aligned with projected demand

      • Feedstock advantage

        India is entering the SAF race with scale, feedstock, and strategic potential. With ~680 MMTPA of agricultural residue (including 230 MMTPA surplus biomass), ~3.4 MMTPA of used cooking oil (UCO), and annual ethanol production capacity exceeding 1,800 crore litres, the country has the raw ingredients to unlock multiple SAF pathways - HEFA, ATJ, and FT - anchored by its strong refining ecosystem and feedstock availability

      • Tripartite Partnership Model: Sharing risk, building scale

        Airlines, SAF producers, and government can create a self-sustaining SAF market in India. Airlines guarantee demand through long-term offtakes, producers deliver reliable supply at scale, and government ensures price stability by managing feedstock costs, and regulating airfare impacts through enabling policy frameworks and incentives. This collaborative approach reduces investment risk, strengthens market confidence, and sets the stage for India to move from pilots to large-scale SAF deployment

      • Hybrid policy architecture for building green aviation economy

        Realising India’s potential as a global SAF hub requires a holistic, systems-level approach that integrates strategic policy, innovative business models, and coordinated industry action. Success will hinge on five foundational pillars: robust policy architecture with mandates and incentives; infrastructure readiness through refinery co-location and digital logistics; carbon market alignment via SAF-linked credits; technology innovation by repurposing ethanol production assets, scaling HEFA and FT through global alliances and technology transfer; and an export strategy that positions India as a trusted global SAF brand. Together, these elements enable scale, competitiveness, and global relevance



      Sustainable skies: Positioning India as a global SAF hub

      Exploring the opportunities, challenges, and enablers that can help transition India from an emerging market to a global leader in sustainable aviation

      Key Contacts

      Anish De

      Global Head for Energy Natural Resources & Chemicals (ENRC)

      KPMG International

      Vivek Rahi

      Partner and National Head - Oil & Gas

      KPMG in India

      Jodhbir Sachdeva
      Jodhbir Sachdeva

      Associate Partner, Aviation

      KPMG in India

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