As the global aviation industry intensifies efforts to reduce carbon emissions, KPMG India has underscored the pressing need for a unified national strategy to scale up Sustainable Aviation Fuel (SAF) adoption. The advisory firm’s latest insights highlight that India’s aviation growth trajectory presents both a challenge and an opportunity to create a self-reliant and sustainable fuel ecosystem.
KPMG India notes that while global aviation contributes roughly 2–3 per cent of total CO₂ emissions, the sector’s share is expected to rise significantly unless transformative measures such as SAF are implemented at scale. For India, which is projected to become the world’s third-largest aviation market within this decade, the adoption of SAF could play a pivotal role in achieving national net-zero targets and ensuring long-term energy security.
The report identifies three major bottlenecks impeding SAF adoption in India—feedstock availability, production scalability, and cost parity with conventional jet fuel. Despite India’s strong agricultural base and potential for non-food biomass sources, the absence of a cohesive feedstock supply chain and supportive investment ecosystem has constrained progress. “Aviation decarbonisation will require a multi-stakeholder effort. Collaboration between airlines, refiners, regulators, and investors is essential to establish the economic viability of SAF,” stated the KPMG India aviation advisory team.KPMG recommends a combination of policy interventions and financial mechanisms to bridge existing gaps. These include targeted fiscal incentives, long-term offtake agreements, blending mandates, and carbon credit mechanisms that can reduce investor risk and stimulate private sector participation. Globally, regions such as the European Union and the United States have already introduced mandates and subsidies to stimulate SAF production, offering valuable lessons for India’s policy design.
The advisory also emphasises the importance of developing regional production clusters to reduce logistics costs and strengthen domestic value chains. Establishing dedicated SAF corridors connecting major airports, fuel producers, and logistics partners could streamline distribution and enhance operational efficiency.
Moreover, the report highlights that the role of technology and innovation will be instrumental. KPMG points to ongoing advances in hydrogenated esters and fatty acids (HEFA), alcohol-to-jet, and Fischer-Tropsch pathways as promising technological routes. Strategic partnerships between refineries, research institutions, and global technology providers could enable the localisation of production technologies and the creation of knowledge capital within India.
KPMG further argues that financing mechanisms such as green bonds, climate funds, and blended finance models could attract institutional investment into the SAF sector. Given the capital-intensive nature of bio-refineries, the participation of both public and private financiers will be critical.
With India’s Civil Aviation Ministry already prioritising sustainability through initiatives like the “Green Airports” framework, KPMG’s recommendations seek to complement ongoing policy directions. “India is uniquely positioned to become a regional leader in Sustainable Aviation Fuel production if the right policy, infrastructure, and investment levers are aligned,” the firm noted.
As global air travel rebounds and international carriers face mounting sustainability mandates, KPMG concludes that India’s proactive role in SAF development could strengthen its competitiveness in global aviation supply chains while advancing its net-zero aspirations.
