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Is the Oil in Your Samosa the Same Oil Planes Want?

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Business

Used Cooking Oil as a Feedstock for Sustainable Aviation Fuel

Used cooking oil (UCO), once treated as waste, is becoming a strategic feedstock for sustainable aviation fuel (SAF). The video’s central business point is that SAF demand could create a new value chain, but scaling it in India depends on reliable collection, processing, and quality-control systems.

Business Model and Industry Opportunity

  • UCO can be collected, processed into SAF, and blended with conventional jet fuel. The video says UCO-based SAF can reduce emissions by about 80% compared with fossil jet fuel.
  • The speaker cites roughly 3 million tonnes of UCO resources in India. The subtitle describes this amount as “a day,” though the period is unclear.
  • UCO is said to sell for about ₹100 per kg, illustrating how a waste stream can become a valuable commodity.
  • SAF is especially relevant to aviation because large commercial aircraft cannot yet rely on batteries for long-distance flights.
  • Growing Indian airline fleets and aircraft orders could increase fuel demand, making domestic SAF production potentially valuable for import substitution and foreign-exchange savings.

Frameworks, Processes, and Playbooks

  • Build a formal UCO-to-SAF supply chain: Collect used oil from households, restaurants, dhabas, and large food-service businesses; aggregate it; then supply it to refineries for processing.
  • Aggregate for viable unit economics: Collection from individual homes is costly and fragmented. The speaker says collection may not be viable for companies when a pickup yields less than 50 litres.
  • Use incentives to create supply: Household payments, cashback, or other rewards could encourage people to deposit UCO rather than discard or reuse it.
  • Create convenient collection points: China is cited as an example of installing collection machines in residential communities, measuring the oil, and paying residents based on volume or density.
  • Formalize and monitor the chain: Branded collection vehicles and organized suppliers can help channel UCO to refineries and reduce the risk of degraded oil being filtered, mixed into fresh oil, and resold as food.
  • Use mandates to create demand certainty: Blending requirements can encourage investment in collection, refining, and SAF supply capacity.

Metrics and Timelines Cited

  • India’s SAF blending targets: 1% by 2027, 2% from 2028, and 5% by 2030.
  • China: A stated goal of 15% SAF in aviation fuel by 2030.
  • The speaker says an estimated 60% of collected UCO does not reach refineries, with some allegedly returning to the food supply through informal channels.
  • The video describes European measures that tax certain Chinese fuel imports while exempting SAF, and says China ended a 13% export rebate on relevant products. These policy changes are presented as influencing supply and trade flows.

Examples and Execution Challenges

  • Indian Oil’s Panipat refinery in Haryana is cited as already producing SAF, with supply going to airlines including IndiGo, Air India, and Akasa.
  • BioD Energy is given as an example of an aggregator that collects oil from thousands of restaurants using branded trucks and supplies it to Indian Oil.
  • The video says India piloted SAF use with SpiceJet and IndiGo, while noting that production and deployment remain limited in scale.
  • The biggest operational constraint is India’s decentralized supply: household collection is difficult, and many small pickups are uneconomical. The informal market also creates food-safety and feedstock-quality risks.

Actionable Takeaways

  • Prioritize high-volume sources such as restaurants and large food-service operators while household collection economics are still being developed.
  • Test incentive-led collection points and measure participation, litres collected per location, contamination, and cost per litre.
  • Build traceability and quality controls so UCO reaches certified processors instead of re-entering the food chain.
  • Align collection and refinery capacity with the announced blending schedule; policy targets alone will not ensure enough compliant feedstock.

Presenter and Sources

  • Presenter: Jayant Mundhra, Groww Edge.
  • Organizations and examples cited: NITI Aayog, Indian Oil, BioD Energy, SpiceJet, IndiGo, Air India, and Akasa.

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