Air India, a Tata Group company, has inked an MoU with Indian Oil Corporation (IOC) to supply sustainable aviation fuel. The agreement is the first collaboration between an Indian airline and a domestic fuel supplier for SAF, a biofuel seen as crucial for reducing carbon emissions in aviation.

IOC has gained international approval for producing SAF from recycled cooking oil at its Panipat refinery, becoming the first Indian refiner to do so. The company aims to increase its manufacturing capacity to 35,000 tonnes per year by the end of 2025, sourcing raw materials from hotels, restaurants, and other food businesses.

SAF is chemically similar to conventional aviation turbine fuel and can be blended into existing aircraft engines. Airbus has said that its aircraft can operate with up to 50% SAF, and Indian carriers have previously performed multiple test flights with SAF blends. Industry experts predict SAF will account for more than 60% of the sector’s global decarbonisation efforts.

The International Civil Aviation Organisation’s CORSIA scheme will mandate carbon offsets beginning in 2027, forcing airlines to use cleaner fuels. India has already set indicative blending targets of 1% in 2027 and 2% in 2028 for international flights, with domestic targets to follow later.