Lucknow: The UP cabinet has approved the Sustainable Aviation Fuel (SAF) Manufacturing Promotion Policy 2026, aimed at attracting investment, promoting clean aviation fuel production and generating employment through the utilisation of agricultural waste and other locally available feedstock.
Units investing Rs 200 crore to Rs 500 crore will fall under the Bronze category, those investing Rs 500 crore to Rs 1,500 crore under Silver and investments exceeding Rs 1,500 crore under Gold. The policy also provides interest subsidies, 100% electricity duty exemption for 10 years, skill development subsidies and reimbursement of patent registration fees. The policy seeks to establish UP as a major hub for SAF manufacturing while reducing carbon emissions from aviation and strengthening energy security. Under the policy, SAF manufacturing units have been divided into three categories based on investment. Eligible units will receive incentives, including exemptions and reimbursements relating to stamp duty, land-use conversion charges, development charges and net SGST. Govt expects the policy to create opportunities for farmers by generating demand for agricultural residues, including paddy straw, wheat husk and sugarcane bagasse, which can be converted into aviation fuel through processes such as pyrolysis and gasification. The UP New and Renewable Energy Development Agency (UPNEDA) will serve as the nodal agency for approving and disbursing financial incentives. A director-level committee under UPNEDA will evaluate applications. The policy will remain effective for five years from its notification or until a replacement policy is notified.