Draft SAF policy proposes 90 per cent local fuel uplift for international

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Indian and foreign scheduled carriers face proposed anti-tankering obligation; draft also backs financial and tax support

By Rohit Vaid

Updated - November 04, 2026 at 06:03 PM. | New Delhi, Nov 4

The requirement would cover trip and taxi fuel, excluding contingency, alternate reserve and additional fuel. | Photo Credit: REUTERS

The Centre’s draft National Sustainable Aviation Fuel (SAF) policy proposes that airlines buy at least 90 per cent of their annual fuel requirements for international flights departing India at domestic airports, to ensure demand certainty for SAF.

The proposal seeks to discourage “economic tankering”, or carrying additional fuel purchased elsewhere to reduce refuelling at Indian airports. The obligation would apply to Indian and foreign airlines operating scheduled international services.

According to the draft reviewed by businessline, the requirement would cover trip and taxi fuel, excluding contingency, alternate reserve and additional fuel.

The 90 per cent requirement relates to aviation fuel uplift, rather than the proportion of SAF blended into conventional jet fuel.

Besides, the draft sets out financial and fiscal support measures for developing the domestic SAF ecosystem.

Support Measures

On October 16, businessline first reported that the Centre was considering funding and tax support for early SAF deployment, including viability gap funding for initial production plants, concessional finance and feedstock assistance.

The draft now confirms that such support measures form part of the proposed policy framework. It envisages viability gap funding, green financing and long-term offtake agreements, alongside possible GST relief, import duty waivers, income-tax holidays and accelerated depreciation.

However, the measures remain proposals. The overall financial outlay would be determined by the petroleum ministry in coordination with the civil aviation ministry.

Domestic Ops

Meanwhile, the proposed fuel-uplift obligation would exclude domestic operations of Indian carriers.

Furthermore, humanitarian, medical and emergency flights would also be exempted, while exemptions or reduced requirements could apply to certain non-scheduled international services and ferry, positioning or maintenance flights.

Moreover, safety requirements, operational difficulties and supply constraints would be considered while assessing compliance.

Additionally, airlines would submit independently verified annual reports on actual fuel uplift at each airport to the Directorate General of Civil Aviation (DGCA).

Nevertheless, unjustified deviations could attract penalties, with detailed rules to be developed by the civil aviation ministry in consultation with the petroleum ministry.

Carbon Reduction Scheme

Separately, the draft proposes mandatory SAF blending shares for international aviation falling within the scope of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

The proposed trajectory is 1 per cent in 2027, 2 per cent in 2028, 3 per cent in 2029 and 5 per cent in 2030.

Subsequent targets, including 10 per cent in 2035 and 20 per cent in 2040, are indicative and would be subject to further decisions.

In addition, the framework provides for a national SAF registry under the DGCA to track transactions and verify associated emissions-reduction claims.

A purchase-based claims mechanism would allow SAF’s environmental benefits to be traded separately from the physical fuel, subject to documentation and verification.

The draft additionally proposes using only domestically manufactured SAF to meet blending obligations, while providing for periodic reviews based on supply readiness, technology and market conditions.

Published on November 4, 2026

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