Synopsis: A quiet shift may be unfolding in India’s biofuel industry as aviation searches for cleaner fuel alternatives. With new technologies, global partnerships, and early projects already underway, one company could be positioning itself at the centre of a potentially massive opportunity that might reshape its long-term growth story.
As the aviation industry faces growing pressure to cut carbon emissions, the search for cleaner alternatives to traditional jet fuel is gaining momentum. Sustainable Aviation Fuel is increasingly being seen as one of the most practical solutions, and governments and airlines around the world are beginning to explore its adoption. Amid this shift, an interesting opportunity could be emerging in India’s biofuel space, raising an important question for investors – could Praj Industries benefit from the rise of ethanol-based jet fuel?
Praj Industries is one of India’s leading industrial biotechnology companies, with a strong focus on innovation, integrated solutions, and execution capabilities. Over the last four decades, the company has built a significant global presence in the environment, energy, and agri-processing sectors. Praj has delivered projects for more than 1,000 customers across over 100 countries, covering all six continents. Its strategy is centered around contributing to the global bioeconomy through two key platforms, BioMobility and Bio-Prism.
The BioMobility platform focuses on providing technology solutions that help produce renewable transportation fuels, supporting efforts to reduce carbon emissions through a circular bioeconomy.
Alongside this, Praj’s Bio-Prism portfolio focuses on technologies used to manufacture renewable chemicals and sustainable materials, aiming to develop alternatives that work in harmony with nature. Supporting these initiatives is Praj Matrix, the company’s advanced research and development facility that serves as the core of its work in developing clean energy solutions within the bioeconomy.
Praj’s overall business portfolio includes bio-energy solutions, critical process equipment and modularization, brewery solutions, zero liquid discharge systems, and high-purity water systems. An experienced leadership team leads the company and positions itself as a responsible corporate citizen. Praj Industries is listed on both the Bombay Stock Exchange and the National Stock Exchange of India.
The company’s shares are currently trading around Rs. 303.40, giving it a market capitalization of about Rs. 5,576.89 crore. It is notable that the stock has declined sharply from its peak of Rs. 874.30 recorded in early January 2025, representing a fall of roughly 65.2 percent. This decline has been driven by a combination of external and internal challenges. Domestically, the rapid achievement of India’s E20 ethanol blending target created an oversupply of ethanol, which slowed down new plant orders.
At the same time, a broader slowdown in global clean energy investments and the impact of tariffs in the United States have delayed several low-carbon fuel projects. These external pressures have been further intensified by internal issues such as high fixed operating costs, lower utilisation of the GenX facility, and a relatively high effective tax rate. In addition, project execution timelines have stretched as customers face tighter credit conditions and funding constraints. As a result, the company has begun shifting part of its focus toward conventional energy and oil and gas markets to help offset delays in green-energy related projects.
What Are Sustainable Aviation Fuels?
Sustainable Aviation Fuel, commonly known as SAF, is a type of synthetic aviation fuel designed to reduce the environmental impact of air travel. To qualify as sustainable, the fuel must be produced from renewable feedstocks rather than traditional fossil fuels. These feedstocks can include used cooking oil, animal fats, vegetable oils, and waste materials from municipal, agricultural, and forestry sources.
However, simply using renewable materials is not enough. SAF must also meet strict sustainability standards set by international frameworks such as the International Civil Aviation Organisation’s CORSIA scheme and the European Union’s Renewable Energy Directive. These rules ensure that SAF production does not negatively affect areas such as food security, water usage, or human rights. Certification agencies independently verify that the raw materials used for SAF do not divert resources that are needed for food production.
From a technical perspective, several different processes can be used to produce SAF. ASTM International, a global organisation that develops technical standards, has approved eight different production pathways. Among these, three methods are currently the most widely used. The first is the HEFA process, which converts vegetable oils, waste oils, and animal fats into aviation fuel through refining and hydrotreating processes.
The second pathway is Alcohol-to-Jet, where alcohols such as ethanol or iso-butanol are chemically processed to remove oxygen and combine molecules in order to create jet fuel. The third method involves producing synthetic fuels using hydrogen and captured carbon dioxide powered by renewable electricity. This approach is commonly known as eFuel or Power-to-Liquid.
The environmental benefits of SAF depend on the type of feedstock and production method used, as some pathways provide greater emissions reductions than others. Even so, developing multiple production methods is considered important because it helps the industry expand supply and improve the availability of SAF.
Currently, SAF has the potential to cut lifecycle emissions by as much as 80 percent compared to conventional jet fuel. One of its key advantages is that it can already be used with existing aviation infrastructure. SAF can be blended with traditional jet fuel at levels of up to 50 percent while maintaining the same performance characteristics. This means airlines can use SAF in current aircraft engines, and airports can handle the fuel without needing major infrastructure changes.
What Is Praj Industries Doing?
Praj Industries is working on developing technology that can convert renewable alcohols into Sustainable Aviation Fuel. The company has partnered with Gevo, Inc. to build an innovative process that uses iso-butanol made from renewable sources such as sugars, starch, and biomass as the primary feedstock for producing SAF. The technology is currently in the final stages of optimisation before full commercial rollout and has already demonstrated the ability to significantly lower carbon emissions when blended with conventional aviation fuel.
Under this collaboration, Gevo will license its proprietary technology, while Praj will supply the engineering expertise needed to build and operate the facilities. Praj’s role includes providing the technology integration, plant equipment, and EPC services required for refineries to convert renewable iso-butanol into Sustainable Aviation Fuel and premium gasoline. The process follows the ASTM-approved Alcohol-to-Jet (ATJ) pathway, which is one of the recognised methods for producing SAF.
In addition to the Gevo partnership, Praj has also signed a Memorandum of Understanding with Axens to jointly pursue SAF projects in India. These projects will focus on producing aviation fuel from low-carbon alcohols using the Alcohol-to-Jet pathway. In this collaboration, Praj contributes its experience in modular project solutions, full project integration, and technologies that produce low-carbon iso-butanol and ethanol from conventional bio-based feedstocks. Axens will supply its Jetanol Alcohol-to-Jet technology along with catalysts, specialised equipment, and related services needed to convert alcohols into SAF.
The production process can also generate additional high-value products. One such co-product is iso-octane, which is used as a specialised fuel in Formula One racing.
What the Management Says About the SAF Opportunity
During the Q3FY26 earnings call, the management highlighted several developments that could support Praj Industries’ long-term growth, particularly in areas linked to biofuels and sustainable aviation fuel.
One of the key positives mentioned was the recent trade agreements that India has signed with the United States, the European Union, and the United Kingdom. According to the management, the United States has reduced tariffs on Indian capital goods from nearly 50 percent to around 18 percent. In addition, exports to the European Union are expected to face zero percent tariffs. These changes could strengthen Praj’s competitiveness in these regions. At the same time, the company noted that imports of ethanol from the United States are not permitted in India, which provides additional support for the domestic ethanol industry.
The management also referred to a recent report released by the government’s public policy think tank, NITI Aayog, titled “Scenarios Towards Viksit Bharat and Net Zero.” The report highlights the growing role of biofuels in India’s path toward achieving net zero emissions. According to the study, sectors such as aviation, long-distance freight transportation, and rural mobility will require access to cleaner fuel alternatives.
The report emphasises that biofuels will play an important role in improving India’s energy self-reliance. It also notes that fuels such as ethanol, compressed biogas (CBG), advanced biofuels, and sustainable aviation fuel are expected to remain key components of the country’s clean mobility strategy in the coming years. The management believes these developments create a positive outlook for Praj’s business.
On the Sustainable Aviation Fuel front, the company stated that its integrated ethanol-to-jet demonstration plant located at its Matrix research and development centre has received strong recognition. During the WINGS INDIA 2026 conference, Mr. Maneesh Kumar, Joint Director General of the Directorate General of Civil Aviation (DGCA), highlighted this development.
The management noted that a draft policy related to SAF blending in India is expected in the near future, and the demonstration plant shows that Praj already has the technology readiness to convert ethanol into jet fuel. At present, the company is executing basic engineering orders for ethanol-to-SAF plants for customers in the United States, and this work is expected to be completed by the end of the current financial year.
Management also provided an update on one of these projects. Praj is currently carrying out a detailed engineering services assignment for a U.S. customer related to an ethanol-to-SAF facility. This phase of work is expected to be completed by the end of March or, at the latest, by the middle of April. After reviewing the engineering estimates and project details, the customer will decide whether to proceed with the investment. The company expects clarity on this decision during the first quarter of the next financial year. At present, Praj’s role in the project is limited to the detailed engineering stage.
The management also discussed progress on its joint ventures with Indian oil companies. The joint venture with Indian Oil Corporation was initially planned to focus on a SAF project as well as the broader biofuel opportunity. However, since a final decision has not yet been taken on which biofuel project should be executed first, no formal announcement has been made regarding this partnership.
In the case of the joint venture with Bharat Petroleum Corporation, the initial focus is expected to be on compressed biogas projects. The plan is to begin operations once at least five projects are finalised under the joint venture. Currently, the company is in the process of short-listing projects and discussing potential participation with developers, and further updates are expected once these discussions reach a conclusion.
Insights shared in an S&P Global interview
Additional insights into the SAF opportunity were also shared by Atul Mulay, President of Corporate Strategy at Praj, in an interview with S&P Global. He stated that sustainable aviation fuel represents the company’s next major area of growth. According to him, global SAF demand currently stands at less than 1 billion litres, but industry estimates suggest that this could expand to around 30 to 40 billion litres by 2030 as airlines make climate commitments and governments introduce regulatory mandates.
Mulay also pointed out that India is already one of the world’s largest ethanol producers, with annual output exceeding 13 billion litres. From the sugar sector alone, the country’s potential to produce sustainable aviation fuel is estimated at around 3.5 to 4 billion litres. India is also working with industry bodies such as the International Air Transport Association and the Indian Sugar and Bio-Energy Manufacturers Association to develop carbon intensity benchmarks for SAF produced from sugarcane.
According to Mulay, ethanol derived from sugarcane can achieve significantly lower carbon intensity levels compared with conventional fossil-based jet fuel. Establishing science-based carbon intensity standards will be important for global trade in SAF and for qualifying under international frameworks such as CORSIA. While sugarcane ethanol already shows lower emissions compared with fossil jet fuel, India will need its own lifecycle assessment framework to support large-scale adoption.
Mulay further outlined Praj’s long-term vision for 2030. The strategy is built around three main pillars. The first is achieving large-scale decarbonisation through fuels such as ethanol, compressed biogas, sustainable aviation fuel, bio-chemicals, and integrated biorefineries. The second pillar focuses on expanding globally by deploying technologies developed in India across both developed and emerging markets. The third pillar involves improving the economics of biorefineries by extracting value from co-products such as proteins, biobitumen, corn oil, and through carbon management solutions. He also noted that the International Energy Agency estimates sustainable biofuels could supply around 15 to 20 percent of global transport energy demand by 2030.
The SAF Race Is Brewing
TruAlt Bioenergy has also begun positioning itself in India’s emerging Sustainable Aviation Fuel market as the aviation sector looks for ways to reduce carbon emissions. The company stated that SAF is currently seen as the only scalable pathway to decarbonise aviation under the global CORSIA framework. According to TruAlt, India has favourable conditions to develop this industry due to its strong ethanol infrastructure, availability of feedstocks, and technological readiness.
The company has signed a technology licensing agreement with Honeywell UOP and has started engineering design work for a proposed Sustainable Aviation Fuel facility in Andhra Pradesh with a planned capacity of around 100 million litres per year. TruAlt is also in discussions with Sumitomo Corporation regarding potential equity participation in the project. In addition, the company expects to receive about Rs. 150 crore of viability gap funding under the government’s PM JI-VAN scheme, which could help strengthen the project’s financial viability.
TruAlt has also signed a Memorandum of Understanding with the Andhra Pradesh Economic Development Board to set up a 310 KLPD ethanol-to-SAF plant in the state, with a proposed investment of around Rs. 2,250 crore. The company stated that it is also exploring strategic partnerships with participants across the aviation ecosystem as it develops its SAF business. Its agreement with Honeywell UOP gives it access to an established SAF production technology pathway that can help the company participate in the aviation fuel market as SAF demand grows in India and globally.
In its Draft Red Herring Prospectus, TruAlt also mentioned that it has signed a non-exclusive Memorandum of Understanding with Praj Industries for the production of Sustainable Aviation Fuel and second-generation ethanol.
When asked about this development during the earnings call, Praj’s management said they were not directly involved in the discussions regarding TruAlt’s SAF project and therefore did not have specific details about the arrangement. They clarified that TruAlt is one of Praj’s customers and that the companies have previously worked together on other technologies.
The management also noted that as the biofuel sector expands, multiple opportunities and enquiries are likely to emerge, but Praj will only pursue projects that make commercial sense and create value for its shareholders. They added that while competition exists in the market, the company has completed the development of its SAF technology and is ready to participate in future opportunities as they arise.
Could Sustainable Aviation Fuel Be Praj Industries’ Next Multibagger Opportunity?
From an analyst’s perspective, Sustainable Aviation Fuel could represent a meaningful long-term opportunity for Praj Industries if the aviation industry accelerates its transition toward low-carbon fuels. Aviation is one of the hardest sectors to decarbonise, and SAF is currently considered the most practical solution to reduce emissions without requiring major changes to aircraft engines or airport infrastructure. As governments introduce blending policies and airlines commit to lowering emissions, the demand for SAF could expand significantly in the coming years.
Praj appears strategically positioned within this emerging ecosystem. The company already has decades of expertise in ethanol and biofuel technologies and is developing solutions to convert renewable alcohols such as ethanol and iso-butanol into aviation fuel through the Alcohol-to-Jet pathway. Its partnerships with technology companies such as Gevo and Axens, along with the ethanol-to-jet demonstration plant at its Matrix research centre, suggest that the company has already developed the technological capability required to participate in this segment. Management has also indicated that the company is currently executing engineering work related to ethanol-to-SAF plants for customers in the United States.
India’s strong ethanol ecosystem could also support the development of a domestic SAF industry. The country already produces large volumes of ethanol annually, and the availability of feedstock from the sugar sector could create an additional supply base for aviation fuel alternatives. At the policy level, discussions around clean mobility, biofuels, and potential SAF blending frameworks further indicate that the sector could gradually gain momentum.
However, the opportunity is still at an early stage and the competitive landscape is beginning to take shape as other companies also explore investments in SAF production. For Praj, the potential upside may lie less in producing the fuel itself and more in supplying the technology, engineering solutions, and equipment needed to build these facilities. If the SAF market scales up and Praj is able to translate its technological readiness into commercial orders, the segment could eventually become a significant growth driver for the company over the long term.
At the same time, the development of the SAF industry faces several challenges that could slow adoption. One of the biggest hurdles is the cost of SAF, which remains significantly higher than traditional jet fuel, limiting demand despite growing interest from airlines. The sector also requires stronger and more consistent policy support, as clear regulatory frameworks and long-term mandates are essential to encourage investment. Although production has increased in recent years, SAF still accounts for only a very small share of global jet fuel consumption, meaning large investments in new facilities will be required to scale supply.
Another challenge is securing sufficient sustainable feedstocks without competing with food production or harming ecosystems, which can restrict the availability of viable raw materials. In addition, while multiple SAF production technologies exist, some pathways are still developing and require further innovation to improve efficiency, lower costs, and complete certification processes.
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