India could produce sustainable aviation fuel at costs up to 40 per cent below global benchmarks by combining surplus crop residue with low-cost green hydrogen powered by solar energy, according to a new report from the India Energy and Climate Center at the University of California, Berkeley, and Energy Innovation.
The report, released in June 2026, identifies a production method called power-and-biomass-to-liquids, or PBtL, as the most cost-competitive pathway for India to enter the global sustainable aviation fuel, or SAF, market.
The timing is urgent. Every winter, farmers across northern India burn an estimated 130 million metric tonnes of agricultural residue to clear fields ahead of the next crop cycle. The fires contribute to some of the worst air pollution in the world. New Delhi has the worst air quality of any global capital, and India accounts for 17 of the 30 most polluted cities globally. PBtL would turn that same residue into jet fuel feedstock — and pay farmers for it.
What PBtL Does
The process works by gasifying agricultural residues such as rice straw and wheat straw, then combining the resulting gas with green hydrogen produced using solar power. The mixture goes through a chemical process called Fischer-Tropsch synthesis to produce liquid fuels, including jet fuel that works in existing aircraft without modification.
Unlike ethanol-based aviation fuel, PBtL does not compete with food crops or require additional agricultural land. It uses residue that would otherwise be burned.
“India already has the building blocks,” said José Luis Domínguez Bennett, a researcher at the India Energy and Climate Center. “The country has low-cost solar, an emerging green hydrogen industry, large volumes of agricultural residue, and companies that are already collecting and moving that residue at commercial scale. PBtL brings these strengths together into a clean fuel pathway that fits India unusually well.”
The report estimates that India could produce PBtL-derived SAF at $1.41 per litre by 2030 — below the global SAF benchmark range of $1.60 to $2.40 per litre and far below the $7.20 per litre price of synthetic aviation fuel in Europe.
India’s cost advantage rests on two foundations. Its solar electricity prices have fallen to $0.025 to $0.030 per kilowatt-hour, among the lowest in the world. Recent green hydrogen auctions have revealed prices as low as Rs 279 per kilogram, approaching the report’s 2030 target of $3 per kilogram.
“India does not need to choose between clean air, energy security and industrial growth,” said Amol Phadke, faculty director of the India Energy and Climate Center at UC Berkeley. “Our analysis shows that India can produce sustainable aviation fuel at costs up to 40 per cent lower than global benchmarks by combining crop residue with low-cost green hydrogen.”
The Export Opportunity
Global demand for SAF is rising fast. Airlines in Europe, the United Kingdom, and the Asia-Pacific region face mandatory blending requirements, but supply falls far short of what is needed. The International Air Transport Association projects that SAF must cover 65 per cent of aviation’s total emissions reductions, requiring more than 360 million metric tonnes annually by 2050. Current production stands at around 2.4 million metric tonnes.
The report estimates that supplying one quarter of the global SAF market could earn India $9 billion in annual export revenue by 2030, rising to $30 billion by 2040. This would require only about 4 per cent of India’s surplus crop residue by 2030.
India imports nearly 90 per cent of its crude oil. Aviation turbine fuel makes up a significant and growing share of that import bill. The closure of the Strait of Hormuz earlier in 2026, triggered by regional conflict, pushed jet fuel costs to between 55 and 60 per cent of airline operating costs at its peak — a direct demonstration of how exposed India’s aviation sector is to global oil shocks.
Where to Start
The report identifies the areas around Delhi, Pune, and Mumbai airports as the most promising locations for early PBtL projects, where agricultural residue supply, solar resources, and airport logistics align. Maharashtra, Haryana, Rajasthan, and Uttar Pradesh are flagged as strong candidates for first demonstration plants.
The report calls on public sector oil companies — Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum — to serve as anchor developers for early projects, and recommends concessional financing, viability gap support for green hydrogen, and alignment of India’s SAF sustainability standards with European and UK requirements.
“Mandated aviation fuel markets are looking for scalable, low-carbon supply, and India has a chance to serve that demand,” said Dan Esposito of Energy Innovation. “If India can de-risk the first commercial PBtL projects, it can turn air pollution and waste management challenges into a durable export industry.”
The crop fires that choke Delhi every November and the jet fuel bills that nearly grounded Indian airlines this spring are the same problem. PBtL is, at least on paper, a way to solve both at once.
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