India seeks balance on aviation growth and paying the sustainability price

How does the market grow at the pace its citizens and government desire, while footing the bill for the carbon emissions this will take?

“There is a challenge to balance the growth along with the climate,” Ekta Agrawal, deputy director, directorate general of Civil Aviation India, told delegates.

And the big question for India is how much and when it should pay for emitting carbon as a developing nation whose air transport industry is far from mature and has players like Air India, IndiGo and Akasa Air, among others, that are making significant strides on domestic and international growth with the intention of becoming fully relevant global players.

So, what is the progress India is making on the aviation sustainability front?

Firstly, as Agrawal explained, India is participating in ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) in the mandatory phase in relation to the emissions generated by its international carriers. The country is in the reporting and verification phase at present with carriers likely to begin paying for their emissions from 2027 onwards.

This payment can be made in two ways. “You can purchase carbon emission units to offset the market [impact]. This is like carbon trading, or you can use sustainable aviation fuel (SAF) to reduce your emissions,” said Agrawal.

In a side-note India is looking at establishing a carbon trading market, with an important question for aviation being whether it is included in such a scheme.

With CORSIA down to handle international emissions, of greater import is the growth of India’s domestic air transport emissions, which will rise exponentially as the hundreds of aircraft ordered by its airlines enter service.

However, with zero SAF production in India today and no desire to hold back the aviation sector, the country is seeking to strike a balance between achieving emissions targets and airline growth.

At present, India’s approach to national emissions control is not sector specific, ie not targeting aviation specifically. However, it will target its growing emissions through the instrument of Nationally Determined Contributions (NDCs), said Agrawal. These are the national climate pledges that articulate how a country will contribute to reducing greenhouse gas (GHG) emissions and adapt to climate impacts.

However, India has launched “indicative targets” for SAF, she explained. These see a 1% SAF blend for international flights only from 2027, 2% in 2028 and 5% in 2030. For now, these targets will not apply to domestic flights.

“These targets are not binding. They are to provide a positive signal to the market to bring in investors so [SAF] production starts and will allow India as a country to see how this is rolling out,” said Agrawal.

Some countries, such as the European Union and the UK, have brought in mandates to encourage SAF usage. “Mandates is not the right approach for India right now,” she said.

Tuhin Sen, assistant director, external affairs India, IATA summarised the current state of play in the SAF production landscape in India detailing the pathways, the declared production quanta and indicative project completion timelines. IATA has noted four SAF production projects in the works in India today.

Sen emphasised the importance of availability of SAF in the Indian market. He noted that mandates, if any, must be complemented with incentives to accelerate the production of SAF in the country.

He added that there is a strong alignment of the DGCA and IATA’s stance on SAF in India. Since India does not yet produce a single drop of SAF, the DGCA’s position on “indicative blending targets is a nuanced and a progressive one.”

“Amongst all the options to decarbonise the aviation sector, SAF contributes to around 65-70%, thus, to stimulate the development of SAF production, policy interventions are required either by providing Viability Gap Finance (VGF) for setting up plants or India should introduce an incentive policy [such as the USA has done, providing tax credit incentives], in addition to its indicative blended targets,” said Vineet Bakshi, director business development India, LanzaTech.

Bakshi added: “This policy mix will deliver both a push and a pull in terms of encouraging SAF off takers and investor interest, he explained. Success of renewable power and ethanol blending is testament of such support from the government in the past.”

LanzaTech’s subsidiary, LanzaJet, is exploring the development of SAF production in India following the signing of an MOU with Indian Oil Corporation Ltd in February 2023.

Bakshi said that the combined offering of LanzaTech-LanzaJet has the capability of taking any kind of waste stream and recycled carbon and turning it into SAF. “We firmly believe, in future, SAF through local waste feedstock will be a local solution for decarbonising the aviation sector.

On the airline front, Air India Express, the low-cost arm of Air India, is taking a lead on sustainability with various initiatives, including several “green flights” designed to optimise all aspects of a flight to improve operational efficiency and reduce fuel consumption. explained Captain Pranav Sood, Chief Pilot Technical, Air India Express.

With CORSIA implementation on the horizon, Sood has begun talking to the airline’s finance team to bring them up to date on the cost implications. “I am saying to them we must begin factoring it into our financial planning,” he noted, with a need to model the cost of carbon offsets [and/or the purchase of SAF] later this decade.

“With Air India Express growing at pace, it must be aware of the implications of its growth. The carrier is inducting Boeing 737 Max aircraft into its fleet at a rate of three per month on average over the coming year,” said Sood.

Although it is monitoring SAF projects, such as that being pursued by LanzaJet, today Air India Express is focusing on a raft of operational measures to improve efficiency.

Its first Green Flight was on 19 April this year between capital Delhi and Ranchi in the north-east of the country, some 800 miles. “We optimised every aspect of this flight working with airports, ATC and handlers,” said Sood.

The result was a 53% fuel burn saving compared to a normal flight demonstrating what can be achieved if all stakeholders work together.

The Air India team took this to another level on 5 June with seven Green Flights taking place across the group’s fleet, including widebody aircraft, and 31 different initiatives all aimed at improving efficiency.

“What the efforts showed is that enhancing existing operational procedures can make an impact. “We don’t need to wait for SAF, we don’t need to wait for anyone right now, it’s just the co-ordination of the ecosystem,” said Sood.

“He does not underestimate the challenge, acknowledging that it took a major effort to undertake these Green Flights and get all the different parties on board. And there was still an opportunity for more [efficiencies],” he added.

More Green Flights are on the cards. “We will do it as much as possible but getting the data is the start with the aim of getting everyone to the table, show the numbers and then talk to all stakeholders in the ecosystem,” Sood said.

Concluding the panel, Ekta Agrawal of the DGCA said: “I believe India is already a leader [on sustainability] by making very responsible choices. And I think the most important thing which needs to change is the attitude of the people towards the environment.

“How many people are going to purchase tickets based on I'm saving more fuel or more I'm emitting less than another airline? No, they go for the price, so the attitude of people that needs to change,” she stated.