India UCO needs globally linked traceable pricing to unlock SAF supply: M11 Energy

India needs a formal pricing and traceability framework for used cooking oil as demand from sustainable aviation fuel projects exposes widespread diversion, inconsistent quality and weak chain-of-custody documentation, executives from M11 Energy Transition said.

India generates substantial UCO volumes, but much of the material remains within informal or unregulated markets rather than entering certified biofuel supply chains. The result is an apparent feedstock shortage despite a sizable theoretical resource base, Kumar M. Iyer, head of sustainability at M11 Energy Transition, said at the India SAF Conclave on Sept 29.

"The UCO is there," Iyer said. "But 95% of that gets diverted, and that is the problem."

Pricing traceable quality

Indian UCO contracts should refer to relevant international market assessments and defined quality specifications rather than the domestic wholesale price index, Anindita Moitra, director at M11 Energy Transition, said.

India's UCO supply chain begins with thousands of restaurants, food manufacturers, institutions and other small generators before oil is collected, aggregated, pretreated and delivered to an industrial buyer. That reverse collection structure is not adequately represented by a wholesale index designed for established bulk commodity flows, she said.

"There are micro-sellers of UCO," Moitra said. "In the reverse situation, we cannot use WPI. It is not logically applicable."

India does not yet have sufficient transparent transactions to establish a widely accepted domestic UCO benchmark, according to Moitra. Contracts could initially use established international assessments, adjusted for location, logistics, certification and quality.

"Pricing comes with traceability and both are intertwined," she said. "Without both of them, SAF is not SAF."

Protecting aggregators

Traceability can often create a commercial conflict because collectors are reluctant to disclose restaurants and other sources for fear that processors will bypass them and procure directly.

M11 Energy Transition has sought to address this through an application that allows aggregators to document collection at source while maintaining their commercial role, Iyer said.

The processor obtains the information required for certification but agrees not to disintermediate the collector. Payments between the aggregator and UCO generator remain separate from the supply agreement between the aggregator and M11 Energy Transition.

The model depends on commercial trust alongside digital controls. Wider implementation would also require safeguards against duplicate volumes, altered records and undocumented mixing.

Paradip project raises feedstock requirement

The issue is commercially significant for M11 Energy Transition, which is pursuing a large SAF investment rather than commenting solely as a feedstock collector.

The board of Indian Oil Corp. Ltd. approved a proposed 50-50 joint venture with M11 Energy Transition for a 100,000 mt/year HEFA SAF project at Paradip.

Moitra said India might initially require UCO imports if SAF obligations expand faster than organized domestic collection. She also proposed considering temporary limits on UCO exports while the domestic market develops, although such measures would need to preserve competitive payments to collectors or risk discouraging formal supply.

Iyer separately called for borrowing costs to reflect verified lifecycle-emissions reductions. A project delivering materially higher emissions savings should receive more favorable financing than one offering only marginal reductions, provided the results are calculated and independently verified under a common methodology, he said.

Platts, part of S&P Global Energy, assessed sustainable aviation fuel HEFA-SPK FOB Straits at $2,445/metric ton Oct. 1, up $15/mt from the previous week.