What is Green Jet Fuel?
Green jet fuel, more formally known as Sustainable Aviation Fuel (SAF), is a catch-all term for jet fuel not derived from petroleum. It's a 'drop-in' fuel, meaning it's chemically identical to conventional jet fuel and can be used in existing aircraft
engines without modification, typically blended with traditional fuel at ratios up to 50%. The big appeal is its potential to slash lifecycle carbon emissions by up to 80% or more compared to its fossil-based counterpart. The most common type today, known as HEFA, is produced from renewable feedstocks like used cooking oil, animal fats, and agricultural residues. More advanced pathways, though less mature, include converting alcohol to jet fuel (ATJ) or even creating synthetic fuels (e-fuels) from captured carbon dioxide and green hydrogen.
The Prohibitive Price Tag
The single biggest obstacle holding SAF back is its cost. As of 2026, SAF consistently costs between two to five times more than conventional jet fuel. In some markets, this premium can be even higher. This isn't just a minor difference; it’s a fundamental barrier for an industry where fuel represents 20-30% of operating expenses. The high price is driven by several factors. First, the cost of sustainable feedstocks, like waste oils and fats, can make up 60-80% of the total production expense. These feedstocks are not only expensive but also limited in supply and face competition from other industries. Second, the production processes are complex and the facilities require significant capital investment. Finally, the industry lacks the massive scale and established supply chain infrastructure that has made conventional jet fuel relatively cheap for decades. Current global SAF production accounts for less than 1% of the world's total jet fuel consumption, highlighting the enormous challenge of scaling up.
Pathways to Affordability
Closing the price gap is the industry's holy grail. The primary path forward is scale. Just as with any technology, from solar panels to flatscreen TVs, increasing production volume creates economies of scale that drive down unit costs. This requires immense investment in new biorefineries. Another key area is technology. Researchers are actively developing more efficient production methods and exploring novel, cheaper feedstocks like algae, municipal solid waste, and forestry residues. Chinese researchers recently announced a breakthrough catalyst that could lead to high-margin SAF production from woody biomass. The most advanced, 'Power-to-Liquids' (PtL) or e-fuels, which create fuel from renewable electricity and captured carbon, promise near-zero emissions but remain the most expensive option for now. Government action is the third critical lever. Policies like blending mandates, which require airlines to use a certain percentage of SAF, create guaranteed demand. Financial incentives like production tax credits and subsidies can directly lower the cost and de-risk investment in new facilities.
The Indian Aviation Context
As the world's third-largest domestic aviation market, India's approach to SAF is crucial. Recognising this, the government has set indicative blending targets for international flights, aiming for a 1% SAF blend by 2027, rising to 2% in 2028 and 5% by 2030. This policy provides a clear signal to the market, turning SAF from a vague aspiration into a concrete planning assumption for airlines and investors. India possesses significant structural advantages, including a large base of potential feedstocks like agricultural residue, a mature ethanol market, and world-class refining capacity. However, the challenge remains significant in a famously price-sensitive market. To meet the 5% target by 2030, analysts estimate India will need massive investments in the range of ₹6-7 lakh crore to build out production capacity. The journey is just beginning, with companies like Indian Oil Corporation partnering on Alcohol-to-Jet projects and the government considering further policy support to turn these ambitions into reality.
