Indian Oil Corp. plans to develop a Rs 1,000 crore ($122 million) sustainable aviation fuel plant as global supplies fall far short of what airlines require to satisfy carbon reduction targets. The facility will have a capacity of 88,000 tonnes of SAF each year, and Indian Oil is looking for partners on the project, according to S.S.V. Ramakumar, director of research and development. He noted that supply agreements with airlines are required to move forward with the investment.
The International Civil Aviation Organisation last year set a goal of achieving zero net emissions by 2050, and SAF has long been regarded as the industry's quickest solution to reduce pollution. However, worldwide production is currently only just a small percentage of what is required, and airlines are banking on a significant increase in supply.
"This is going to be a great business," Ramakumar said during an interview. "The reason we conceived of such a large plant is that you won't get economies of scale unless the amount of capacity is higher."
The plant, which would be built at Indian Oil's Panipat refinery north of New Delhi and will use LanzaJet's alcohol-to-jet technology, is expected to be the country's first SAF factory if it is built. Mangalore Refinery and Petrochemicals Ltd., a competitor, is proposing another plant utilizing an alternate technology.
Tax breaks are also required for Indian Oil to move forward with the plant investment, according to Ramakumar, who did not explain. He also mentioned the possibility of selling the fuel to Southeast Africa and Asia.
The next stage will be a government proposal for combining SAF with jet fuel, this would be critical in getting airlines to sign supply deals with Indian Oil. As per Ramakumar, an oil ministry councils he chairs advocated mixing 1% SAF into normal fuel starting in 2026, followed by an average ramp up.
Airlines will also require government tax benefits or credits for carbon emissions to make SAF profitable given to the high operating costs, he said.
Global aviation contributes more than 2% of the greenhouse gases warming the globe, while other options for reducing pollution are limited. Battery-powered aircraft lack the range required for medium- and long-distance flights, and hydrogen will probably require many years to become a viable choice.
