India SAF scale-up hinges on finance, feedstock contracts: executives

India has sufficient feedstock resources, refining capabilities and conversion technologies to develop a large sustainable aviation fuel industry, but projects will struggle to secure financing without long-term blending targets, price-support mechanisms and bankable supply and offtake contracts, industry executives said at the India SAF Conclave in New Delhi from Sept. 28-29.

Developers, technology licensors and aviation representatives said the country's proposed blending trajectory of 1% in 2027, 2% in 2028 and 5% by 2030 provides an initial demand signal, but does not by itself distribute the risks associated with capital-intensive SAF projects.

"The business and any commercial activity is all about how the risks are distributed and how stakeholders see their own benefits," Vibhav Agarwal, CEO of Essar Future Energy, said.

Developers must evaluate SAF projects through the perspective of lenders, who will examine whether feedstock supply can be secured through long-term contracts, whether binding demand will exist, and whether airlines or fuel suppliers will sign durable offtake agreements, Agarwal said.

Banks would also assess blending access, airport infrastructure and the long-term economics of projects before committing capital, he added.

A two- or three-year blending trajectory is insufficient for investments intended to operate over several decades, according to Vibhav Agarwal, who called for visibility about how India's blending requirement could increase during the next 10-15 years.

He urged the government to add SAF and other advanced biofuel facilities to its harmonized master list of infrastructure projects, thereby improving their access to long-term capital.

Essar Future Energy is developing a greenfield complex intended to produce SAF, hydrotreated vegetable oil and other low-carbon fuels.

Pathways to follow regional resources

Speakers highlighted that India would require multiple technologies rather than a single nationally preferred SAF pathway.

Ranjit Kulkarni, President of Honeywell Technologies Africa, said policy creates the market, mandates determine its size, technology responds to that demand, and finance controls the pace of deployment.

HEFA and refinery co-processing provide the most immediate opportunities because oils and fats are comparatively close to conventional aviation fuel and can use much of the existing refining, logistics and fuel-handling system, he said.

However, the most readily commercial option today would not necessarily be the optimum long-term solution. India's ethanol, biomass and renewable-energy resources could support alcohol-to-jet, biocrude and power-to-liquids pathways as those markets mature.

Ranjit Kulkarni has previously said India's agricultural residues and ethanol ecosystem creates an advantage, but requires local aggregation, preprocessing and partnership models connecting farmers, aggregators and fuel producers.

He compared construction schedules of around 20 months in China with development cycles that can reach five years elsewhere, saying the three-year difference could determine a project's internal rate of return.

Distributed FT plants proposed

Sachin Joshi, chief commercial officer of Velocys, identified biogas produced from agricultural, dairy and sugar-sector waste as a promising feedstock for Fischer-Tropsch SAF in India.

Converting organic residues into biogas would allow projects to use established reforming, FT synthesis and fuel-upgrading processes while avoiding some of the syngas-quality challenges associated with direct biomass gasification, he said.

Smaller modular plants could be located near feedstock rather than transporting dispersed biomass over long distances. The resulting liquid intermediate could then be aggregated more easily for centralized upgrading.

Sachin Joshi pointed to the NovaSAF 1 project in Uruguay as a model that could be replicated in India.

The project is designed to convert dairy biogas and renewable electricity into about 1,500 mt/year of SAF, with Trafigura identified as the offtaker.

Velocys currently says the project is in development, with FID expected in 2026 and operations expected in 2028.

Sachin Joshi said India could begin with about 5,000-10,000 mt/year modular FT facilities matched to local biogas output, then replicate the configuration as localization could further reduce construction times and costs.

He said the industry was targeting FT-SAF production costs below $2,000/mt, rather than claiming that cost had already been achieved.