India Needs SAF Mandates and Demand Signals to Drive Investment, Industry Adviser Says

An industry adviser identified as Mundol said India will require government mandates and clear demand signals to unlock sustainable aviation fuel investment, in an interview with Platts, part of S&P Global Energy, published August 31. He said SAF currently carries a price premium of between 50% and 200% over conventional jet fuel, depending on the producer and market, making voluntary adoption by airlines unlikely. "At these cost levels, there's no airline that's going to pick up SAF. Only a mandate will make them feel the need to pick it up," he said.

Mundol said investment in domestic SAF production capacity would only materialise once investors could see credible demand projections. "Capital will come when people will see that there is a short demand for it or some kind of reasonable demand signals that they can put into their spreadsheets," he said, adding that mandates could also create the scale necessary to reduce costs over time. On feedstock, he said India has significant biofuel and biogas potential but lacks organised collection systems for agricultural residues, municipal food waste and used cooking oil, noting the country currently operates approximately 210 biogas plants against a national target of 5,000. "Let's have a national campaign that we don't lose a drop of cooking oil," he said, calling for structured collection networks covering hotels and restaurants.

Mundol's organisation is advising the Indian government on the design of the Indian Carbon Credit Trading Scheme. He said carbon pricing could support industrial decarbonisation if implemented with robust monitoring and realistic targets, and that policymakers must balance targets strong enough to reduce emissions against targets that do not undermine industrial competitiveness. He also said recent geopolitical developments have broadened how policymakers view clean energy: "Energy transition is now not regarded as just a climate agenda question, but it is as much about national security, economic stability, livelihoods protection, risk management for country and for companies," he said, adding that biofuels and biogas can help reduce dependence on imported fossil fuels.

This account describes a familiar early-stage pattern in low-carbon fuel markets: production economics stay unattractive to buyers until a regulator forces the issue, and producers stay unwilling to build capacity until they can see a buyer base large enough to plan against. The gap between a 50-200% cost premium and airline willingness to pay is exactly the kind of spread that voluntary commitments rarely close on their own, which is why the adviser frames mandates as the mechanism that converts uncertain climate intent into a bankable demand curve.

Feedstock organisation is the other half of the constraint. A national target of 5,000 biogas plants against roughly 210 operating today shows how far collection infrastructure for agricultural residues, food waste and used cooking oil would need to scale before domestic SAF production could rely on it, independent of whatever price signal a mandate might create. Carbon pricing, through the Indian Carbon Credit Trading Scheme now under design, is positioned as a parallel lever, provided monitoring is robust and targets do not erode industrial competitiveness.

What determines whether this moves from advice to action is the shape of any mandate India ultimately adopts and how it is phased against the 5,000-plant collection target and the carbon scheme's design details, none of which have been set.