SAFA pushes for government backed price stabilisation fund; seeks floor price

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Writes to Petroleum Ministry

By Richa Mishra

Updated - October 20, 2026 at 12:15 PM. | Hyderabad, Oct 20

(representative image) | Photo Credit: REUTERS/RULA ROUHANA

The Sustainable Aviation Fuel (SAF) Association has reached out to the key ministries like Environment, Petroleum & Natural Gas, and Civil Aviation to create a well-designed extended producer responsibility (EPR) framework for used cooking oil (UCO).

The UCO-EPR framework can strengthen domestic feedstock supply, improve food safety and support India’s emerging SAF industry, it has said in a recent letter to the key stakeholders.

An EPR framework for UCO is a law that makes companies who sell cooking oil responsible for collecting and recycling it after it has been fried.

“We have taken it up with the Ministries,” Secretary General of SAF Association Rohit Kumar told businessline. 

Asked if the Petroleum & Natural Gas Ministry accepts the EPR framework, will it subsidise the gap through a dedicated green fund, or will it mandate that airlines absorb the costs under the threat of penalties, he said “The framework should distribute responsibilities fairly across the value chain, rather than place the entire burden on airlines.”

SAFA has proposed a government-backed UCO Price Stabilisation Fund, potentially supported through a cess on edible oil imports. Such support could help de-risk investments, strengthen collection networks and enable the industry to grow, Kumar said.

Asked if to prevent speculative trading and hyper-inflation of UCO feedstock prices, will the Petroleum Ministry demands a “price ceiling” on tradable EPR certificates, and if so then will that ceiling remain high enough to incentivise collectors, he said “SAFA has proposed a minimum price (floor price) for certified UCO to make collection commercially viable, rather than a price ceiling on EPR certificates.”

“Transparent pricing, digital traceability and safeguards against market manipulation will be important to protect collectors and fuel producers while promoting circularity,” he said.

The Ministry’s long-term roadmap heavily weights on multi-feedstock pathways, including agricultural residues, bagasse, and municipal waste. Asked if the Ministry rejects a standalone UCO-EPR policy in favour of a unified, multi-feedstock credit system that covers all domestic waste streams simultaneously, then what will happen, he said, “We see UCO-EPR as an immediate first step, not an alternative to India’s wider multi-feedstock strategy.”

Agricultural residues, bagasse and municipal waste will also be important for scaling SAF, he elaborated adding, “A dedicated UCO framework can help secure near-term domestic feedstock supplies while supporting India’s ability to meet emerging global aviation de-carbonisation requirements.”

SAFA has recommended the immediate formation of a stakeholder working group with industry participation to evaluate the proposal and develop an implementation roadmap. The larger objective is to move India from a SAF mandate to a functioning market, backed by reliable domestic feedstocks, viable economics, and long-term investment, he added.

According to SAFA, the UCO-to-EPR framework is not merely a waste management intervention, but a strategic national lever that integrates energy security, aviation de-carbonisation, public health protection, and circular economy development. 

“With coordinated support from Ministries of Petroleum & Natural Gas, Civil Aviation, Environment, FSSAI, and other concerned ministries, this approach can enable the development of a globally competitive SAF eco-system while delivering an estimated ₹8–13 lakh crore in cumulative national economic benefit,” he said.

Published on October 20, 2026

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