From farm to sky: Feedstocks fuel India�s path to cleaner skies

DOWNLOADS Interactive popup full report (62 pages) In the near future, scrap products like used cooking oils or agricultural residues will be fueling airplanes in the skies. India is the country that champions sustainable aviation fuels (SAFs). India is one of the fastest growing aviation markets in the world and is currently working to produce and deploy SAFs on a large scale. Global aviation's efforts to decarbonize are increasingly being viewed as a key component. They must align with the Paris Agreement targets. This sector is responsible for around 3 percent of global greenhouse gas emissions, which is a surprising number considering the potential climate-change impacts that could be up to four times greater due to non-CO2 pollutants. McKinsey's report, which was co-authored with the World Economic Forums Clean Skies for Tomorrow Coalition, is a blueprint for India's ongoing transition towards SAFs. India's coalitions have set the goal to fly 100 million passengers on SAFs with a 10% blend by 2030. India is well-positioned to make a significant contribution in this area. Around 20 of the more than 80 organizations comprising the Clean Skies for Tomorrow Coalition are Indian. India is expected to move from being the eighth-largest aviation market in the world to third by 2025. It also produces abundant amounts of agricultural residues (farming wasteproducts such as husks, chaff, and used cooking oil) that will be used to make SAFs. India has access to low-cost renewable energy sources and technology that can scale up the deployment of SAFs. To convert the roughly 166 million tonnes of Indian feedstocks into 22-24 million tons of SAFs, leadership, commitment, coordination, and collaboration from a wide range of stakeholders is key. Three areas of priority are: Collecting systems for feedstock. To harvest agricultural residues or other waste products, new methods must be implemented at the farm level as well as an end-to-end separation infrastructure. Four pathways are used to produce production systems. ASTM approved four types of production technologies and feedstocks: hydroprocessed esters, fatty acids made of lipid feedstocks (such used cooking oil), gasification using the Fischer-Tropsch process from municipal solid bio and plastic scrap or agricultural residues; alcohol to jet fuel made of agricultural residues and excess sugar streams; and power to liquid made with hydrogen technology and carbon derived from industrial sources. The different production paths require approximately $2.5 billion in initial investment. Systems for delivering equipment to fill operational gaps. ASTM-approved SAFs will be deployed with minimal infrastructure and delivery infrastructure. They are almost identical to existing fossil-based jet fuels. SAFs can be blended with fossil jet fuels by oil marketers working with oil producers. As current regulations prohibit mixing on airport grounds, it would be necessary to build blend facilities along the delivery routes. This will require additional tanks as well as supply routes. The price is an obstacle to overcome when deploying large-scale SAFs. Because SAFs are still a new fuel source, they can be between 200-500 percent more expensive than conventional jet fuels. Although costs will fall as production technology improves, it is difficult to bridge the gap right now without substantial government investment and support from the private sector. Three possible ways that the Indian government could support scaling up SAF production and deployment are: The government could offer funds to help close the cost gap by providing tax breaks for aviation fuel, lowered SAF taxes, and subsidies for SAF-production investments. The government could also pursue a budget neutral option, where it imposes a surcharge on passengers to stop price competition between airlines due to the deployment of more costly SAFs. The SAF unit costs could adjust the surcharge. It could also consider a 50/50 cost-sharing model with passengers and the government, in which subsidies and passenger duties would be combined to ease the SAF transition. The private sector is gaining momentum. Clean Skies for Tomorrow in India has committed to expanding the use of SAFs. Many see an opportunity to capitalize on a market that is growing rapidly and show global leadership. SpiceJet, for example, has already committed to the 2030 target. They are also conducting proof-of concept test flights. Direct investments in pilot projects can drive innovation and wider adoption. SAFs are cleaner fuel alternatives and also offer many social and economic benefits, as eco-conscious travel is becoming a higher priority worldwide. According to the report, India's SAF industry will contribute $2.8 billion to India's combined GDP if it produces 360,000 tons annually by 2030. There would be more than 120,000 green jobs created. Farmers incomes would rise by 10 to 15%. Better waste management systems and less open air burning would also lead to overall pollution reductions. SAFs have many benefits for India's aviation industry. It is not only a responsible decision, but it also allows India to make a significant impact on the standards and norms that will govern the future of inclusive, safe and clean mobility. Clear Skies For Tomorrow: Implementing Sustainable Aviation Fuels at Scale In India (PDF7.88MB)

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