Indian Oil Corporation and Air India have taken a significant step towards greener aviation by signing a Memorandum of Understanding (MoU) for the supply of Sustainable Aviation Fuel (SAF). This collaboration marks a major milestone in India's journey towards sustainable air travel and reinforces both companies' commitment to reducing carbon emissions in the aviation sector.

Key Highlights of the Partnership

• The MoU outlines a shared commitment to promote the adoption of low-carbon fuels in aviation.
• The partnership aims to support global decarbonization goals and contribute to the transition toward more sustainable air transport operations.
• IndianOil has become the first Indian company to receive ISCC CORSIA certification for SAF production at its Panipat Refinery.

IndianOil's Trailblazing Role

IndianOil's Chairman, A.S. Sahney, emphasized the strategic importance of this partnership, stating, "The signing of this MoU with Air India represents a strategic step in India's transition to sustainable aviation. With our ISCC-CORSIA-certified SAF from Panipat, IndianOil is ready to provide a sustainable fuel solution that will help decarbonize air travel."

The ISCC CORSIA certification, granted under ICAO's Carbon Offsetting and Reduction Scheme for International Aviation, establishes IndianOil's capability to produce SAF that meets stringent international sustainability and lifecycle carbon emission standards.

Air India's Commitment to Sustainability

Campbell Wilson, CEO & Managing Director of Air India, expressed the airline's dedication to sustainability: "Through this MoU with IndianOil, Air India is committed to support the Government of India's initiatives to promote sustainable development in the aviation sector and to further its own sustainability goals to achieve the IATA Net Zero by 2050 target."

Air India is actively pursuing initiatives in operational efficiency and low-carbon emissions as part of its strategy to achieve the IATA Net Zero by 2050 target.

Collaboration Details

The MoU was signed by Shailesh Dhar, Executive Director (Aviation) of IndianOil, and P. Balaji, Group Head - Governance, Regulatory, Compliance (GRC) and Corporate Affairs of Air India. The agreement focuses on:

1. Collaborating on the supply of SAF to meet CORSIA targets for international flights.
2. Ensuring a reliable, transparent, and sustainable fuel supply to support both companies' environmental goals.
3. Potentially exceeding CORSIA targets, demonstrating a strong commitment to sustainability.

This partnership between IndianOil and Air India not only reinforces India's position as a front-runner in sustainable aviation and energy transition but also sets a benchmark for the industry. As both companies work together to integrate certified green fuels into commercial operations, they are paving the way for a cleaner and more sustainable future in Indian aviation.

Indian Oil Corporation (IOC), India's largest oil refiner, has announced plans for a capital expenditure of 340 billion rupees in FY26. The company also stated it will continue purchasing Russian oil based on economic considerations. This announcement comes alongside recent reports of IOC's increased processing of Russian oil and forecasts for its Ennore LNG terminal.

Russian Oil Processing and Discounts

In the June quarter, IOC processed 24% of its oil from Russia, according to a company executive. Russian oil was available at attractive discounts, approximately USD 1.50 per barrel lower than benchmark prices. This price advantage has likely contributed to IOC's increased reliance on Russian crude and its decision to continue purchases based on economic factors.

Strategic Implications

IOC's move to increase Russian oil processing and its planned capital expenditure reflect the changing dynamics in the global oil market and India's efforts to secure cost-effective energy sources. The company's strategy comes amid ongoing geopolitical tensions and changing trade patterns in the energy sector.

Market Impact

The decision to process a quarter of its oil from Russia could have significant implications for IOC's financial performance. The discounted rates may potentially lead to improved margins for the company, depending on how effectively it can integrate this cheaper crude into its overall operations. The substantial capital expenditure planned for FY26 also signals the company's commitment to growth and expansion.

Ennore LNG Terminal Forecast

An executive from Indian Oil Corp has predicted that the Ennore LNG terminal will operate at 31-32% capacity. This forecast indicates that the terminal will run significantly below its full operational potential, which could have implications for the company's LNG operations and overall energy strategy.

Looking Ahead

As global oil markets continue to evolve, it will be interesting to observe how Indian Oil Corp and other Indian refiners adjust their sourcing strategies and investment plans. The ability to secure discounted oil could provide a competitive advantage, but it also comes with potential geopolitical and supply chain considerations that the company will need to navigate carefully.

Indian Oil Corp's increased processing of Russian oil, the forecast for the Ennore LNG terminal, and its significant capital expenditure plans underscore the complex interplay between geopolitics, energy security, and corporate strategy in the oil and gas sector. Stakeholders will likely be watching closely to see how these developments impact the company's performance and India's overall energy landscape in the coming years.