Oils & Fats International (13/08/2026) - India continues to make significant progress in its biofuels programme, according to a US Department of Agriculture (USDA) report.

The country had achieved a notable milestone in renewable energy, reaching its Paris Agreement non-fossil fuel capacity target years ahead of schedule and securing a leading global position, the 23 July ‘India – Biofuels Annual’ said.

However, the biodiesel programme faces considerable challenges from feedstock supply constraints that could hold back blending plans, according to the report.

Meanwhile, India was taking important steps with sustainable aviation fuel (SAF) for international flights and sustainable maritime fuel development, positioning itself as a regional leader in transportation fuel innovation, the USDA’s Foreign Agricultural Service (FAS) report said.

Biodiesel blending in India was expected to remain below 1% in 2026, well below the 5% target for 2030.

Feedstock availability represented the main constraint on further expansion, the report said.

India’s biodiesel production relies on diverse feedstocks, including animal fats, non-edible oils, used cooking oil (UCO), and imported palm oil and palm stearin.

Although used cooking oil (UCO) consumption was at a record high, collection remained logistically difficult and UCO availability was projected to increase only marginally due to a decline in edible oil availability.

India’s domestic edible oil production was expected to decrease in 2026, with imports also expected to decline due to geopolitical instability in West Asia.

Despite this, Indian biodiesel production was forecast to total 640M litres in 2026, a 15% increase compared to the 2025 revised estimate of 556M litres.

Biodiesel consumption was also projected to increase by approximately 18% in 2026 from the revised 2025 estimate of 475M litres to 560M litres.

Additionally, palm stearin consumption was trending up in 2026 but remained below historical levels due to reduced Indonesian exports.

Overall, installed biodiesel capacity totalled 2bn litres, with usage of around one-third due to feedstock limitations.

Indian exports of biodiesel imports in 2025 were negligible, and this trend was expected to continue throughout the current year.

Exports were forecast to increase in 2026 from 76M litres the previous year to 110M litres due to increased demand from the European Union (EU), as it looked to offset lower biodiesel imports from Argentina.

India was also advancing SAF development with mandatory blending targets of 1% for international flights by 2027, moving to 5% by 2030. Indian Oil Corporation (IOCL) received India's first international certification in December 2025 and currently produced 30,000 tonnes/year of SAF.

As one of the largest consumers of edible oils globally, India held a strategic advantage for hydrotreated esters and fatty acids (HEFA)-based SAF production from UCO, the report said.

However, the supply chain presented difficulties, particularly in collecting UCO from both industrial facilities and residential households, which could hold the sector back, the USDA said.

Sustainable maritime fuel development was also progressing, with a major Indian port achieving a standard that could support 500,000 tonnes of methanol availability by 2028/29.

Read more at https://www.ofimagazine.com/news/indian-biofuels-sector-progresses