IndianOil and Air India Forge Green Skies Pact: MoU Signals Major Leap Toward Sustainable Aviation Fuel Adoption

In a landmark move to decarbonize Indian aviation, Indian Oil Corporation Ltd (IndianOil) and Air India have signed a Memorandum of Understanding (MoU) to collaborate on the supply and adoption of Sustainable Aviation Fuel (SAF). The agreement marks a pivotal moment in India’s journey toward cleaner skies, aligning with national and global climate goals while positioning both companies as leaders in sustainable transport innovation.

The MoU comes at a time when India is preparing to mandate SAF blending in jet fuel for international flights starting in 2027. With IndianOil’s Panipat refinery now certified to produce SAF from used cooking oil, the partnership with Air India is expected to accelerate commercial deployment and set industry benchmarks.

Strategic Objectives of the MoU

1. Facilitate the commercial supply of SAF to Air India’s fleet, starting with international routes  
2. Support India’s SAF blending mandate of 1 percent by 2027, scaling to 2 percent by 2028  
3. Promote circular economy practices by converting waste cooking oil into aviation-grade fuel  
4. Encourage other domestic carriers to adopt SAF through demonstrated feasibility and cost-efficiency  

Key Developments and Milestones

- IndianOil’s Panipat refinery has received ISCC CORSIA certification, making it India’s first SAF-certified facility  
- Production capacity is set at 35,000 tonnes per annum, sufficient to meet the initial national blending requirement  
- SAF will be produced from used cooking oil collected from large hotel chains, restaurants, and food manufacturers  
- Air India will begin pilot usage of SAF blends in select international flights, with full-scale rollout planned post-2027  

Environmental and Economic Impact

The SAF initiative is expected to significantly reduce carbon emissions from aviation, which currently accounts for nearly 12 percent of transport-related CO₂ emissions globally. SAF can cut lifecycle emissions by up to 80 percent compared to conventional jet fuel.

- India’s net-zero emissions target by 2070 is supported by SAF adoption  
- The initiative could benefit over five lakh farmers through feedstock supply chains  
- More than one lakh green jobs may be created in logistics, refining, and fuel distribution  
- Reduction in foreign exchange outflow due to decreased reliance on imported crude oil  

Operational Framework and Feedstock Logistics

Used cooking oil, typically discarded after a single use, will be collected by certified agencies and delivered to the Panipat refinery. The refinery will convert the oil into SAF using proprietary refining technologies that meet international aviation standards.

- Aggregators will focus on sourcing oil from large-scale users like ITC and Haldiram’s  
- Collection from small-scale users and households remains a logistical challenge  
- SAF produced will be blended up to 50 percent with conventional aviation turbine fuel depending on availability  

Policy Alignment and Industry Significance

The MoU aligns with India’s broader energy transition strategy, including ethanol blending, green hydrogen production, and biofuel development. It also reflects the government’s commitment to the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), under which SAF certification standards are defined.

- IndianOil is the only Indian company with ISCC CORSIA certification for SAF  
- The partnership sets a precedent for other oil marketing companies and airlines  
- Demonstrates India’s readiness to meet international climate obligations in aviation  

Looking Ahead

With production slated to begin by December 2025, the IndianOil-Air India partnership is expected to catalyze SAF adoption across the aviation sector. As more refineries and airlines join the movement, India could emerge as a regional hub for sustainable aviation fuel, driving innovation and environmental stewardship.

Sources: Moneycontrol, Indian Express, NewsX, Outlook Business, MSN, PTI.