Sustainable Aviation Fuel Production Facility

Project Overview

An Indian energy conglomerate and a European Alcohol-to-Jet (ATJ) technology partner engaged IMARC Engineering to establish a greenfield Sustainable Aviation Fuel (SAF) production facility at Belagavi, Karnataka. The project was structured against the Government of India's recently notified SAF framework, with the Ministry of Petroleum and Natural Gas notification dated 17 April 2026 amending the Aviation Turbine Fuel (Regulation of Marketing) Order, 2001 to bring SAF-blended ATF within the formal regulatory framework, and the subsequent Ministry of Civil Aviation clearance dated 24 April 2026 (with concurrence from MoPNG and DGCA) establishing the ATJ pathway as a formal SAF production route in India, anchored on the blending mandate trajectory of 1 percent SAF on select international routes by 2027, 2 percent by 2028, and 5 percent by 2030.

The scheme's demand pull is validated by the first commercial SAF-blended flight operated by Akasa Air on 8 September 2026 with the flight flying from Chhatrapati Shivaji Maharaj International Airport (Mumbai) to Manohar International Airport (Goa) using 1 percent SAF-blended ATF supplied by BPCL and by the compounded pressure from the ICAO Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) mandatory phase beginning January 2027 alongside the European Union's ReFuelEU Aviation regulation requiring 2 percent SAF on flights departing EU airports from 2025 rising to 70 percent by 2050. Total SAF demand in India is projected at approximately 140 to 180 million litres by 2028, representing a INR 5,000-plus Crore first-mover manufacturing opportunity anchored on India's ethanol surplus following the successful 20 percent ethanol blending programme deployment.

The project involved establishing 60,000 tonnes per annum of ASTM D7566-certified SAF production capacity via the Alcohol-to-Jet (ATJ) pathway the technology route best suited to India's structural ethanol surplus with an integrated ethanol feedstock consumption of approximately 120,000 tonnes per annum drawn from the surrounding Karnataka and Maharashtra sugar belt distillery ecosystem alongside the emerging Indian second-generation bioethanol supply base. Site infrastructure was designed for Phase 2 expansion adding a HEFA (Hydroprocessed Esters and Fatty Acids) pathway line integrating used cooking oil and specialty lipid feedstocks aligned with the broader Indian used cooking oil aggregation infrastructure development.

Client's Challenges

The client faced several specific challenges in establishing greenfield SAF production in India:

• Alcohol-to-Jet pathway process engineering: Engineering the multi-step ATJ conversion process, comprising ethanol dehydration to ethylene, ethylene oligomerisation, hydrogenation, and hydroprocessing to produce jet-range hydrocarbons, with the associated catalyst systems, high-pressure hydroprocessing infrastructure, and product fractionation required for ASTM D7566 Annex 5 (ATJ-SPK) specification compliance across the SAF product output.
• Ethanol feedstock supply integration: Structuring resilient ethanol feedstock supply drawing on the surrounding Karnataka and Maharashtra sugar belt distillery ecosystem alongside the emerging Indian second-generation bioethanol supply from Praj-CSIR-IIP-aligned distilleries and the specialty ethanol quality requirements for aviation-grade end use.
• ASTM D7566 and CORSIA certification pathway: Achieving ASTM D7566 Annex 5 (ATJ-SPK) drop-in SAF certification for the SAF product family alongside ICAO CORSIA Sustainability Criteria compliance verification covering lifecycle GHG emissions accounting, land-use change verification, and sustainability aggregation critical certifications required for domestic OMC blending pool participation and international CORSIA-covered airline offtake.
• MoPNG ATF Control Order compliance and OMC pool integration: Meeting the amended ATF (Regulation of Marketing) Order, 2001 (as notified on 17 April 2026) requirements covering SAF-blended ATF regulatory framework alongside integration with the Oil Marketing Company (Indian Oil Corporation, Hindustan Petroleum, Bharat Petroleum) blending and distribution infrastructure at the international-route airport network.
• Green hydrogen and specialty catalyst supply: Managing supply of green hydrogen required for the hydroprocessing steps, alongside specialty ATJ catalyst systems from established international specialists under structured long-term licence and supply arrangements aligned with the LanzaJet-adjacent technology framework.
• Workforce build-up: Recruiting 240 personnel including chemical process engineers, catalyst specialists, quality technicians, and skilled process operators in the Belagavi regional labour market, supported by structured technology-transfer partnerships with the European ATJ licensor and by talent inflow from the surrounding Karnataka and Maharashtra distillery ecosystem alongside the broader Indian petroleum refining talent base.

What We Did

• Pre-Investment and Strategic Advisory

Our feasibility study evaluated four candidate Indian locations Belagavi (Karnataka), Kolhapur (Maharashtra), Muzaffarnagar (Uttar Pradesh), and Nashik (Maharashtra) with Belagavi selected on the strength of the surrounding North Karnataka sugar belt providing structural ethanol feedstock supply from the established distillery ecosystem, established rail and road connectivity to the Bengaluru, Mumbai, Hyderabad, and Chennai international airport SAF blending demand pool, adjacency to Karnataka's growing renewable energy base supporting the emerging green hydrogen and green methanol integration for hydroprocessing, the Karnataka Industrial Policy incentive framework alongside the state's biofuel promotion policy, and access to engineering talent from IIT Dharwad, VTU Belagavi, KLE University, and the surrounding technical education base.

CapEx planning of INR 487 Crore covered the ethanol receiving and dehydration reactor area, the oligomerisation reactor and hydroprocessing area, the product fractionation and finished SAF storage area, the quality laboratory, the effluent treatment plant, and central utilities. Financial modelling demonstrated post-tax IRR of 19.8 percent at full ramp with a 5.8-year payback.

• Engineering and Design Services

IMARC designed a 24,000 sq.m built-up facility on a 22-acre plot comprising the ethanol receiving and storage area with dedicated aviation-grade quality verification, the ethanol dehydration reactor area producing ethylene intermediate, the ethylene oligomerisation reactor area producing longer-chain hydrocarbons, the hydrotreating and hydroprocessing area for saturation and jet-fuel-range conversion, the product fractionation area separating the SAF product from lighter and heavier hydrocarbon co-products, the finished SAF storage and blending area engineered for OMC dispatch, the quality laboratory covering gas chromatography, mass spectrometry, and full ASTM D7566 specification testing infrastructure, the effluent treatment plant meeting Karnataka State Pollution Control Board specifications, and central utilities.

Process utility design covered 8 MW grid demand supplemented by a 2 MW captive rooftop solar array, dedicated high-pressure hydrogen supply infrastructure (with connectivity to an adjacent green hydrogen supply arrangement), dedicated specialty gas supply for catalyst regeneration and quality analysis, integrated MES for lot-level and batch-level traceability aligned with ASTM D7566 and CORSIA Sustainability Criteria documentation, and rail siding connectivity for both incoming ethanol feedstock and outgoing SAF finished product despatch to the OMC infrastructure.

• Procurement and Supply Chain Support

We executed a multi-geography procurement programme across 42 critical vendors. The ATJ process technology license alongside catalyst systems was sourced from established European ATJ specialists (aligned with the LanzaJet-comparable technology framework used by the announced IOCL Panipat 86,800 TPA ATJ plant). Ethylene oligomerisation and hydroprocessing reactor infrastructure was sourced from European specialty chemicals equipment specialists.

Product fractionation and quality laboratory infrastructure was sourced from European specialists with documented aviation fuel industry references. Effluent treatment plant infrastructure was sourced from Indian water technology specialists. Ethanol feedstock sourcing was structured through structured long-term supply arrangements with the surrounding Karnataka and Maharashtra sugar belt distillery ecosystem, building to approximately 120,000 tonnes per annum of aviation-grade ethanol supply by Year-2 alongside select second-generation bioethanol supply from Praj-CSIR-IIP-aligned distilleries.

Green hydrogen supply was structured through an adjacency arrangement with an alkaline electrolyser deployment supported by Karnataka renewable energy supply. Documented Domestic Content reached 68 percent in Year-1 operations and 74 percent in Year-2 as the Indian catalyst, specialty steel, and equipment supplier ecosystem developed alongside the ethanol feedstock base.

• Project Execution and Site Management

Our turnkey project management delivered 24 months from groundbreaking to first commercial SAF despatch, coordinating civil construction, mechanical and electrical erection, hydroprocessing area installation, catalyst charging, and phased commissioning across the ethanol receiving, dehydration reactor, oligomerisation reactor, hydroprocessing, product fractionation, and storage zones.

Phased commissioning ran the ethanol receiving and dehydration reactor area first, followed by the oligomerisation reactor with initial hydrocarbon product qualification in month 20, then the hydroprocessing area with the first SAF-specification hydrocarbon output in month 22, and finally the product fractionation and finished SAF storage area with the first ASTM D7566-certified SAF batch dispatched to the OMC blending pool in month 25.

Multi-vendor coordination across European, US, and Indian contractors required a 20-strong owner's engineering team supplemented by 10 European resident engineers from the ATJ technology partner during the reactor commissioning, catalyst charging, and initial ASTM D7566 certification phases.

• Compliance, Quality and Sustainability

IMARC led certification readiness for ASTM D7566 Annex 5 (Alcohol-to-Jet Synthetic Paraffinic Kerosene), covering aviation fuel quality, specification compliance, and blending suitability up to 50% SAF. The Year-1 SAF output was also assessed against ICAO CORSIA sustainability criteria, including lifecycle GHG accounting, land-use-change verification, and ethanol feedstock sustainability. The project covered compliance with the MoPNG ATF (Regulation of Marketing) Order 2001, as amended on 17 April 2026, the Ministry of Civil Aviation SAF Framework, DGCA requirements, BIS IS 1571 for SAF-blended ATF, and ISO 9001, ISO 14001, ISO 45001, and ISO 50001.

Environmental compliance included Karnataka State Pollution Control Board consents, Hazardous Waste Authorisation, and applicable EPR requirements. The facility achieved IGBC Gold certification through 2 MW of rooftop solar, heat recovery from hydroprocessing, and variable-frequency drives across HVAC and process pumps. These measures supported approximately 18% of daytime energy demand from solar and 20% lower facility energy intensity than the cited Southeast Asian specialty chemicals benchmark. The SAF product was also reported to deliver approximately 80% lower lifecycle GHG emissions than conventional ATF under the ICAO CORSIA methodology.

Final Results

Operational Performance

The facility achieved mechanical completion in 24 months with first commercial SAF despatch in month 25. Full 60,000 tonnes per annum nameplate capacity was reached at 76 percent utilisation (equivalent to 45,600 tonnes of ASTM D7566-certified SAF in Year-2, drawing approximately 91,200 tonnes of ethanol feedstock) by month 22 of operations, with sustained first-pass specification acceptance across the SAF product output.

ASTM D7566 Annex 5 (ATJ-SPK) drop-in SAF certification was completed in Year-1, ICAO CORSIA Sustainability Criteria compliance was verified across the ethanol feedstock supply base, MoPNG ATF (Regulation of Marketing) Order compliance was secured, Ministry of Civil Aviation SAF Framework alignment was completed, and successful supplier qualification audits were passed with three Oil Marketing Companies (integrating into the IOCL, HPCL, and BPCL blending pool at the international-route airport network), two Indian commercial airlines, and one export customer aligned with European Union ReFuelEU Aviation compliance requirements across the first operational year.

Financial Outcomes

Final CapEx of INR 460 Crore delivered 5.5 percent savings against the INR 487 Crore budget through optimised civil packaging, disciplined Indian-fabrication leverage across the structural and process infrastructure scope, adjacency benefits from the surrounding Karnataka and Maharashtra ethanol distillery ecosystem, coordinated multi-vendor procurement, and Karnataka Industrial Policy alongside biofuel promotion incentive framework benefits.

Year-2 revenue of INR 590 Crore was generated at an EBITDA margin of 12 percent, consistent with early-stage SAF sector economics where mandate-driven premium pricing (approximately 1.5 to 2.5 times conventional Aviation Turbine Fuel) supports meaningful margins during the initial 2027 to 2030 mandate ramp, a margin trajectory aligned with the INR 5,000-plus Crore first-mover manufacturing opportunity anchored on India's 140 to 180 million litre projected SAF demand by 2028.

Market Access

Long-term supply commitments were signed with three Oil Marketing Companies, Indian Oil Corporation, Hindustan Petroleum, and Bharat Petroleum, covering annual SAF offtake for the international-route blending pool in line with the 2027 1% SAF blending mandate ramp. BPCL had already demonstrated operational SAF supply capability through the first commercial SAF-powered flight of Akasa Air on 8 September 2026.

The project also secured commitments from two Indian commercial airlines for direct SAF offtake for international-route operations aligned with CORSIA compliance requirements, along with one export customer for SAF supply to a European Union airline operator under the ReFuelEU Aviation framework, including its 2% SAF mandate from 2025. The facility positioned itself as an ASTM D7566-certified preferred Indian SAF supplier for the 2027–2030 blending mandate ramp, while also targeting emerging CORSIA-aligned international carbon markets.

Sustainability Impact

Our integrated design combining 2 MW captive rooftop solar covering approximately 18 percent of facility daytime energy demand, heat recovery from hydroprocessing operations, variable-frequency drives across HVAC and process pump systems, and LED lighting throughout achieves 20 percent lower facility energy intensity versus the Southeast Asian specialty chemicals manufacturing industry benchmark.

Process water reclamation is delivered through closed-loop cooling cycles and effluent treatment plant recovery. The SAF product produced by the facility delivers approximately 80 percent lifecycle greenhouse gas emissions reduction versus conventional Aviation Turbine Fuel across the well-to-wake analysis under the ICAO CORSIA methodology, positioning Indian aviation towards the Government of India's Net Zero 2070 commitment.

The Year-2 output of 45,600 tonnes of SAF translates to approximately 1.4 lakh tonnes of avoided lifecycle CO2 emissions versus the equivalent conventional Aviation Turbine Fuel deployment. The facility holds IGBC Gold certification and operates end-of-life spent catalyst recovery partnerships aligned with the emerging Indian circular-economy petroleum sector framework.

Strategic Impact

The project established a meaningful greenfield Sustainable Aviation Fuel production capability under the MoPNG-MoCA SAF Framework, positioning the client across the structural SAF demand trajectory, with the 1 percent SAF blending mandate on select international routes from 2027 escalating to 2 percent by 2028 and 5 percent by 2030, the ICAO CORSIA mandatory phase from January 2027 covering global international aviation, the European Union ReFuelEU Aviation regulation creating compulsory demand for Indian carriers serving EU routes, and the INR 5,000-plus Crore first-mover Indian SAF manufacturing opportunity anchored on the 140 to 180 million litre 2028 demand projection.

Year-2 revenue of INR 590 Crore, ASTM D7566 and CORSIA Sustainability Criteria certification, three Oil Marketing Company supply commitments, the two Indian commercial airline offtake commitments, and the European Union export entry led the client to approve Phase 2 expansion comprising a HEFA (Hydroprocessed Esters and Fatty Acids) pathway line integrating used cooking oil and specialty lipid feedstocks.

IMARC Engineering's end-to-end EPCM advisory, combining ATJ pathway process engineering, ethanol feedstock supply chain integration with the surrounding distillery ecosystem, MoPNG-MoCA SAF Framework navigation, ASTM D7566 and CORSIA certification pathway support, and disciplined multi-vendor execution, enabled the client to anchor a strategically important Indian industrial asset in a sector positioned at the intersection of India's aviation decarbonisation trajectory, the mandatory international CORSIA-aligned compliance requirement, and the emerging global SAF supply-side opportunity.