In a significant step towards establishing Uttar Pradesh as a major hub for Sustainable Aviation Fuel (SAF) manufacturing, the Yogi government has approved the implementation of the Uttar Pradesh Sustainable Aviation Fuel Manufacturing Promotion Policy-2026. The decision was taken at a Cabinet meeting chaired by Chief Minister Yogi Adityanath on Friday.
The policy aims to promote decarbonisation in the aviation sector, strengthen energy security, encourage private investment and innovation, and create new green employment opportunities in the state. It also emphasises developing new value chains in rural areas and diversifying farmers’ income by promoting SAF production using locally available feedstock such as agricultural residues, municipal waste and non-edible oilseeds.
Uttar Pradesh has abundant agricultural residues, including rice husk, wheat straw and sugarcane bagasse, which can be used to produce SAF through technologies such as pyrolysis and gasification.
The state’s leading position in sugarcane production and ethanol manufacturing also provides a strong foundation for second-generation biofuels and Alcohol-to-Jet SAF technologies.
The policy classifies SAF manufacturing units into three categories based on capital investment. Units investing ₹200 crore to ₹500 crore will be classified as large, those investing ₹500 crore to ₹1,500 crore as mega, and those with investments exceeding ₹1,500 crore as ultra-mega units.
These units will be eligible for various incentives, including exemption or reimbursement of stamp duty, exemption from land-use conversion charges and development fees, reimbursement of net SGST, interest subsidy, 100% exemption from electricity duty for up to 10 years, skill development subsidy and reimbursement of patent registration fees.
The policy also provides for customised incentive packages, wherever required, and the establishment of centres of excellence. In cases involving land allotment, front-end land subsidy will also be available.
The Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) has been designated as the nodal agency for the approval and disbursement of financial incentives to SAF manufacturing units. An evaluation committee will be constituted under the Director, UPNEDA, to assess applications.
The policy will remain in force for five years from the date of its implementation or until a new policy comes into effect, whichever is earlier.
Yogi Cabinet approves Sustainable Aviation Fuel Manufacturing Promotion Policy-2026 to boost major investments and green employment
