Will air travel be expensive or cheap? Adding SAF to planes will be mandatory; Know the strictness on airlines and its impact on ticket rates

Sustainable aviation fuel in the aviation sector to reduce carbon emissions globally and achieve net-zero targets. SAF (Sustainable Aviation Fuel – SAF) Strict steps are being taken towards making its use mandatory. SAF is a non-fossil based green fuel, which is mainly produced by refining used cooking oil, agricultural waste (poly/straw), algae and non-edible biomass. Technically it is a ‘drop-in’ fuel, meaning it can be used by blending it directly with conventional aviation turbine fuel (ATF) without any changes to existing aircraft engines or existing airport fueling systems.

In line with the CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) agreement of the International Civil Aviation Organization (ICAO) and India’s national climate goals, the Aviation Ministry has prepared a roadmap for phased blending:

• 1% blending mandatory from 2027: In the initial phase, it is proposed to make it mandatory to add at least 1 per cent SAF to jet fuel for international flights.

• Target of 2% in 2028: There is a plan to increase this ratio to 2 percent in the next phase.

• 5% share by 2030: A target has been set to mix 5 percent green fuel in the total aviation fuel on international routes by the year 2030.

• Possible expansion on domestic flights: There are plans to make it mandatory for domestic flights as well in the future once local production capacity and supply chain is stabilised.

The biggest question for passengers is what effect this decision will have on their pockets. The ground reality is that making SAF mandatory will hamper air travel in the near future. There is no scope for cheapening, rather an increase in ticket rates by 2% to 5% Can be seen:

1. 2 to 4 times more expensive than conventional ATF: Currently, due to limited production and complex refining technology, the price of SAF is two to four times higher than that of normal jet fuel.

2. Fuel accounts for 30-40% of operating costs: Jet fuel alone accounts for about 30 to 40 percent of the total operating cost of any airline. When the basic cost of fuel increases, airlines will eventually pass the burden on passenger fares in the form of ‘Green Cess’.

3. Strict monitoring and fines: Heavy carbon credit liability and financial penalties are set to be imposed on airlines violating norms or blending below prescribed limits, which will put pressure on airlines for strict compliance.

According to aviation experts, the only solution to prevent excessive surge in ticket rates is to start mass production of SAF within the country. India’s major oil marketing companies (IOCL, BPCL, HPCL) have accelerated work on setting up bio-ATF manufacturing plants at Panipat and other refineries. If the central government provides subsidy on raw material (biomass), GST exemption and ‘supply-side incentives’, then the production cost will be controlled, thereby reducing the additional burden of expensive air travel on common travelers.