With EU’s stringent fuel regulations looming, India readying its playbook on green aviation fuel

New Delhi: Setting aside previous reservations, India, the world’s third-largest aviation market, is set to join discussions with the apex intergovernment body on civil aviation that could mean signing up to stringnt global clean fuel regime, two government officials said.

The discussions with the international Civil Aviation Organisagion (Icao) will be on its green aviation scheme Corsia, an acronym for Carbon Offsetting and Reduction Scheme for International Aviation.

This scheme aims to promote a globally harmonized system of sustainable aviation fuel usage for airlines, with some mandated thresholds. So far, 129 countries have joined Corsia. India has stayed away on account of reservations on these thresholds.

The reason New Delhi is now joining these discussions with Icao is a looming deadline with far stricter norms set by the European Union. The 27-nation grouping has threatened to fine countries if their airlines fail to comply with these norms.

Aviation fuel is one of the major contributors to greenhouse gas emissions that cause climiate change.

Not to participate

While India had earlier expressed its reservations against Corsia, and decided not to participate in the voluntary phase (2021-26), Indian airlines will have to meet offsetting requirement under Corsia starting 2027. 

The issue has assumed urgency in the backdrop of EU’s stringent regulations that mandates a minimum of 2% sustainable aviation fuel (SAF) in fuel for flights originating from EU starting in 2025, failing which airlines will be fined. 

These EU mandates will progressively increase to 6% by 2030, 20% by 2035, and 70% by 2050.

SAF refers to non-conventional aviation fuel produced through alternative feedstocks, including grains, alcohol, and residual food waste. With Corsia applicable to all international flights starting 2027, as many as 129 countries have agreed to participate from 1 January 2025.

“To address this challenge, discussions are on with key ministries including those of civil aviation, environment, forest and climate change, and petroleum and natural gas,” said one of the two officials cited above requesting anonymity.

India has adopted a cautious approach given the European Union’s carbon border adjustment mechanism (CBAM) which will tax the ‘embedded carbon’ in imports of goods from emission-intensive sectors such as steel, aluminium, cement, hydrogen, electricity, and fertilizers; and may impact 0.05% of Indian GDP.

“A plan is under discussion to ensure that nothing gets agreed in Corsia that is not in India’s interest. Once the EU’s SAF norms kick in, our airlines will have to meet the standards or pay fines,” said the second government official.

The development also assumes significance for India that has the world’s third largest domestic aviation market, behind the US and China. Rating agency ICRA projects India’s international air passenger traffic in FY2025 to grow by 8–11% in FY2025, reaching between 407 and 418 million.

“Discussions have commenced following thorough consultations with all key stakeholders, acknowledging that SAF represents the future amid a growing emphasis on clean energy,” said the first official cited above.

Blending target set

India on its part has India has set a 1% SAF blending target in 2027 and 2% in 2028; and also set up the Global Biofuels Alliance (GBA) with the US and Brazil as its founding members. 

Indian airlines have been readying themselves. Budget carrier Indigo operates an international ferry flight with 10% blended fuel from Toulouse to Delhi. While Air India (then Vistara) operated a 30% blended SAF ferry flight from Seattle to Delhi in March 2023; Spicejet operated a demonstration flight with 25% SAF.

“From the very beginning, India has been concerned about the implications of Corsia on the developing states. With active support for like-minded countries, India has strongly advocated and has been able to lower the Corsia baseline to 85% of 2019 emission to benefit Indian carriers along with reduction in ‘Individual Growth Factor’ for compliance cycles,” India’s ministry of civil aviation said in a 23 December statement.

Queries emailed to the spokespersons of the ministries of environment, climate and forest change; civil aviation; petroleum and natural gas ministry and ICAO remained unanswered until press time.

With the prospects of a growing SAF market, several state-run conventional energy companies including NTPC are diversifying into SAF space. Mint earlier reported that NTPC Green Energy Ltd (NGEL) in talks with global airlines including British Airways, Lufthansa, Singapore Airlines, and Virgin Atlantic, among others, to secure deals for supplying SAF. The cleaner aviation fuel will be supplied from NGEL’s green hydrogen hub in Andhra Pradesh.