Global mandates and oil volatility put focus on synthetic jet fuel

A recent report has highlighted the urgent need for India to focus on synthetic jet fuel to address escalating aviation fuel consumption and volatile oil markets. According to the study titled 'India’s Aviation Opportunity: Turning Agricultural Residue and Low-Cost Solar into Competitive Sustainable Aviation Fuel with Power-and-Biomass-to-Liquids', the country's aviation sector is expected to witness a substantial increase in jet fuel demand, with consumption projected to grow by 7.7% annually.

By 2047, aviation turbine fuel consumption could potentially double fivefold, reaching a staggering 62 million tonnes by 2050. This rapid expansion poses significant challenges for India's energy security, as the nation currently relies heavily on imports for nearly 90% of its crude oil, leaving it susceptible to international price fluctuations and supply disruptions.

To mitigate this vulnerability, the researchers emphasized the potential of power-and-biomass-to-liquids (PBtL) technology as a highly viable domestic alternative. By harnessing surplus agricultural residue and low-cost solar energy, combined with green hydrogen, PBtL offers the technical capacity to produce between 37 million and 67 million tonnes of sustainable aviation fuel.

At the upper end of this production range, synthetic jet fuel could potentially meet India's entire projected aviation fuel demand by 2050 while utilizing only a small fraction of non-fertile land for solar installations.

The report further pointed out that Indian synthetic fuel producers have a unique opportunity to tap into high-premium export markets in Europe. Regulatory frameworks in the EU and the UK mandate fuel suppliers to meet stringent sustainable aviation fuel targets, with EU blending mandates gradually rising from 2% in 2025 to 70% by 2050.

Notably, the EU's rules explicitly exclude biofuels derived from food and feed crops, effectively eliminating pathways like sugarcane ethanol-to-jet. This regulatory advantage gives the PBtL route a distinct edge over alternative technologies.

While early investment in regional synthetic fuel infrastructure may not yield immediate cost parity with fossil fuels, the study revealed that the financial protection offered by domestic synthetic fuel during global crises is significant. The authors noted that the recent US-Israel strikes on Iran, resulting in the closure of the Strait of Hormuz, led to a sharp increase in crude oil prices, with the US price averaging $197 per barrel ($1.24 per litre) and the US-Jet crack spread reaching $86.22 per barrel ($0.54 per litre) during the week ending March 20, 2026.

Consequently, conventional Indian jet fuel prices on international routes surged to $2.39 per litre, representing a 70% increase over the estimated 2030 production cost of domestic PBtL fuel.