BPCL to commission its first green jet fuel production facility by 2027 in line with govt’s blending mandate

The capacity of the facility and investment required by BPCL for setting up of the plant are yet to be finalised

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26 Aug, 2025 12:21

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State-run Bharat Petroleum Corporation Limited (BPCL) is planning to commission the company’s first sustainable aviation fuel (SAF) facility by 2027, in line with the government’s blending mandate, a source with direct knowledge of the matter told Moneycontrol.

The company is currently evaluating the technology for SAF production, such as oil-to-jet or ethanol-to-jet. “The talks are in the preliminary stage as of now. We are looking at the technology (for production),” the source said.

BPCL would set up the upcoming SAF production facility at its existing refinery locations either in Kochi or Mumbai. The capacity of the facility and investment required for setting up of the plant are yet to be finalised.

Queries sent to BPCL remain unanswered at the time of publishing.

SAF, or bio-jet fuel, is a low-carbon fuel used in aircraft and made from non-petroleum products such as ethanol, which results in lower emissions compared with conventional jet fuel. The blending of SAF with aviation turbine fuel (ATF) has the potential to reduce greenhouse gas emissions by up to 80 percent, compared to traditional jet fuel.

The government is yet to set rigorous SAF blending targets but mandates are expected to kick in from 2027. The assumption is that the government will mandate 1 percent SAF blending with ATF for domestic airlines beginning 2027.

For 1 percent blending of SAF in jet fuel, India would require around 140 million litres of SAF per year.

Focus on SAF

As India aims to achieve the target of net-zero emissions by 2070, the government has been focused on shifting towards a green economy. The adoption of SAF is a move in that direction.
Globally, the aviation sector contributes to around 12 percent of carbon dioxide emissions from transportation. SAF could help reduce these emissions.

By the SAF initiative, the government also expects to boost the rural economy and help farmers get additional income as the anticipated 1 percent SAF blending mandate would benefit more than 5 lakh farmers supplying sugarcane as feedstock. The move also promises to create over 1 lakh green jobs, according to government data.

In a similar move, the government has set the target of achieving 20 percent ethanol blending with petrol by 2025.

BPCL expansion plans

The state-owned oil marketing company currently operates three refineries, in Mumbai, Kochi and Bina in Madhya Pradesh, and is also working on setting up a new refinery to meet the country's rising energy needs.

Chairman and managing director G Krishnakumar has said that BPCL plans to invest Rs 1.7 lakh crore over the next five years in the core oil refining, fuel marketing, petrochemical and clean energy businesses.

Of the total investment, the company has earmarked Rs 75,000 crore for refineries and petrochemicals, Rs 8,000 crore for pipeline projects, and Rs 20,000 crore for its marketing business. BPCL has planned an investment of Rs 25,000 crore for its gas business, Rs 10,000 crore for green energy and Rs 32,000 crore in upstream production, mainly in Mozambique and Brazil.