The temporary closure of the Strait of Hormuz in 2026 exposed a structural vulnerability in European energy security. Although the immediate disruption primarily affected crude oil and liquefied natural gas markets, it also highlighted the risks associated with long, geographically concentrated fossil-fuel supply chains. At the same time, the European Union is progressively mandating the decarbonisation of aviation and maritime transport through legally binding renewable fuel targets, while India is rapidly expanding its production of advanced biofuels based on agricultural residues, forestry biomass and organic waste. These developments create the conditions for a new form of energy partnership between Europe and India.
The commercial case for such a corridor rests on the complementarity of the two economies:
- Europe possesses many of the world’s leading engineering firms, process licensors, industrial investors and fuel distributors — including Airbus, TotalEnergies, Technip Energies, Axens, Neste, Eni and Repsol — but faces structural constraints on the domestic availability of sustainable biomass.
- India, by contrast, possesses one of the world’s largest agricultural sectors, abundant lignocellulosic residues, competitive engineering and construction costs, and an increasingly supportive policy framework for advanced biofuels. Combining European capital and technology with Indian feedstock and industrial capacity would allow both sides to reduce dependence on imported fossil fuels while developing new low-carbon industrial value chains.
Such a partnership would differ fundamentally from conventional hydrocarbon trade. Rather than relying on the extraction and export of finite resources, it would constitute an integrated commercial and regulatory architecture linking Indian feedstock production, industrial fuel manufacturing, digital certification, export infrastructure, maritime transport, European import terminals and long-term regulatory demand into a single commercial system.
Produce for European Regulatory Demand
The most commercially attractive products during the initial phase are likely to be those supported by binding European demand:
- Sustainable Aviation Fuel (SAF) represents the strongest opportunity because aviation has few credible alternatives to liquid hydrocarbons and fuel suppliers must progressively increase SAF blending under the ReFuelEU Aviation Regulation, which establishes minimum SAF shares of 2% in 2025, 6% in 2030, 20% in 2035 and 70% in 2050.
- Renewable Methanol and Bio-LNG offer similar advantages for maritime transport as FuelEU Maritime steadily tightens greenhouse-gas intensity requirements for ships calling at European ports. The required reduction increases from 2% in 2025 to 6% in 2030, 14.5% in 2035 and 80% in 2050. The regulation is fuel-neutral but expressly includes liquefied biomethane, biomethanol and e-methanol within its lifecycle-emissions accounting framework.
- Advanced Ethanol could serve both as a renewable chemical feedstock and as an intermediate for alcohol-to-jet SAF pathways, while biomethane would be exported primarily as liquefied bio-LNG or converted into renewable methanol rather than transported directly as compressed gas.
Collectively, these policies create long-term regulatory demand that substantially reduces market uncertainty for investors compared with voluntary corporate commitments.
A 2021 study commissioned by the Ministry of New and Renewable Energy identified rice, cotton, wheat, maize and sugarcane among the major contributors to national biomass-energy potential, with particularly large state-level resources in Punjab, Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh and Andhra Pradesh.
Produce from Non-food Feedstocks
However, the competitiveness of an India-Europe biofuels corridor will depend less on the fuels themselves than on the origin of the biomass from which they are produced. European regulations increasingly differentiate fuels according to feedstock type rather than their chemical composition.
Fuels derived from agricultural residues, forestry residues, municipal organic waste and other non-food lignocellulosic feedstocks generally receive more favourable regulatory treatment than fuels produced from conventional food crops because they minimise concerns relating to indirect land-use change and competition with food production.
India possesses a particularly broad resource base within these categories. A 2021 study commissioned by the Ministry of New and Renewable Energy estimated approximately 754.5 million tonnes of crop-derived biomass, of which around 228.5 million tonnes remained surplus after existing uses. It identified rice, cotton, wheat, maize and sugarcane among the major contributors to national biomass-energy potential, with particularly large state-level resources in Punjab, Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh and Andhra Pradesh.
Feedstock selection therefore becomes a commercial rather than merely technical decision. A fuel meeting all physical quality specifications may nevertheless command little value in the European market if its underlying biomass falls outside recognised sustainability categories or cannot demonstrate compliance with European traceability requirements. Biomass classification, rather than fuel chemistry alone, ultimately determines market access.
Integrate Compliance into Production
The principal constraint on large-scale exports is unlikely to be production technology but regulatory compliance. European renewable fuel markets require comprehensive documentation demonstrating sustainability and greenhouse-gas performance throughout the supply chain. Certification cannot be treated as an administrative exercise undertaken after production; it must be embedded within project design from the outset.
The principal constraint on large-scale exports is unlikely to be production technology but regulatory compliance. European renewable fuel markets require comprehensive documentation demonstrating sustainability and greenhouse-gas performance throughout the supply chain. Certification must be embedded within project design from the outset.
Each shipment requires verifiable information covering the geographic origin of the biomass, its legal harvesting status or waste classification, land-use history, transport distances, processing energy, methane emissions, lifecycle greenhouse-gas performance and chain of custody from feedstock collection to final export. The European Union’s Union Database, together with recognised voluntary certification schemes such as ISCC EU and REDcert, increasingly provides the framework through which renewable fuels are verified before entering the European market.
For Indian producers, this implies the creation of digital biomass registries capable of recording feedstock movements from individual farms, village aggregators and forestry operators through processing plants, storage facilities and export terminals. Geospatial mapping, digital weighbridge records, electronic invoices and periodic third-party audits would allow small producers to participate in European supply chains while maintaining regulatory compliance. Certification added only after fuels reach Rotterdam or Marseille is unlikely to satisfy future European reporting requirements.
A practical mechanism would be the establishment of pre-certified sourcing zones in states such as Maharashtra, Gujarat, Karnataka or Uttar Pradesh, where land-use status, residue availability and default emissions factors have already been verified. Standardising these datasets before project development would reduce certification costs, accelerate investment decisions and increase confidence among European buyers.
Commercial scale will require geographic concentration. Rather than dispersing production across numerous facilities, an India-Europe corridor would benefit from a limited number of integrated production and export clusters linked to major ports on India’s western coast to improve economies of scale while simplifying certification, storage and customs procedures.
Develop Concentrated Export Hubs
Commercial scale will also require geographic concentration. Rather than dispersing production across numerous independent facilities, an India-Europe corridor would benefit from a limited number of integrated production and export clusters linked to major ports on India’s western coast to improve economies of scale while simplifying certification, storage and customs procedures. This approach would be consistent with India’s Sagarmala strategy, which promotes port-proximate industrial capacity, coastal economic zones and port-linked industrial clusters as a means of reducing the cost and transit time of domestic and export logistics.
A western corridor could connect biomass-producing regions in Maharashtra and Gujarat with Mumbai Port, Jawaharlal Nehru Port, Hazira, Deendayal Port at Kandla and Mundra. These ports offer different combinations of liquid-bulk handling, tank storage, pipelines, rail access and international shipping connectivity. Mumbai operates petroleum and chemical facilities at Jawahar Dweep and Pir Pau; JNPA possesses an existing liquid terminal and is developing additional liquid-cargo capacity; Hazira operates liquid-cargo berths connected by pipelines to a tank farm; Deendayal Port has a dedicated chemical and liquid-handling complex; and Mundra combines chemical and petroleum tankage with LPG, LNG, bunkering and extensive rail infrastructure.
The European end of the corridor could be organised around established energy and chemical hubs such as Rotterdam, Antwerp-Bruges, Hamburg and Marseille Fos. Rotterdam already operates as a major European biofuel, methanol and LNG import, storage and bunkering centre.
The European end of the corridor could be organised around established energy and chemical hubs such as Rotterdam, Antwerp-Bruges, Hamburg and Marseille Fos. Rotterdam already operates as a major European biofuel, methanol and LNG import, storage and bunkering centre. Antwerp-Bruges possesses extensive liquid-bulk storage, chemical handling and blending services and already supports LNG and methanol bunkering. Hamburg is preparing additional sites for alternative-fuel bunkering, while Marseille Fos combines large petroleum and chemical terminals, two LNG terminals, extensive storage capacity and multimodal connections to southern and central European markets.
Concentrating exports through a small number of hubs could improve vessel utilisation, consolidate storage and testing volumes and reduce the number of operators and locations that must be incorporated into certification and chain-of-custody systems. This latter benefit is particularly relevant because EU certification rules require economic operators to maintain site-level mass balances, document transfers between suppliers and customers and permit audits of relevant storage locations. Where a collection point operates several storage sites, each site may fall within the scope of the audit. The proposition that concentration would simplify certification is therefore a reasonable commercial inference from the structure of the EU verification system.
Establish Bankable Long-term Demand
The principal commercial challenge facing an India-Europe biofuels corridor is unlikely to be production capacity but revenue certainty. Advanced biorefineries require capital expenditures measured in hundreds of millions of euros and are therefore financed against predictable cash flows rather than expectations of future spot-market demand. Reliance on volatile European fuel markets would significantly increase financing costs and could prevent projects from reaching financial close altogether.
Commercial viability depends on long-term offtake agreements with creditworthy European counterparties, including airlines, aviation fuel suppliers, shipping companies, integrated energy firms, industrial consumers of renewable methanol and ethanol, and airport or port fuel consortia.
Commercial viability therefore depends upon long-term offtake agreements with creditworthy European counterparties, including airlines, aviation fuel suppliers, shipping companies, integrated energy firms, industrial consumers of renewable methanol and ethanol, and airport or port fuel consortia. Contracts extending over ten to fifteen years would provide the revenue stability necessary to mobilise both commercial debt and institutional equity.
A distinguishing feature of renewable fuels is that they generate multiple sources of value simultaneously. Beyond the physical fuel itself, producers also supply verified greenhouse-gas reductions and compliance value created under European renewable fuel mandates. These components are increasingly priced independently. As a result, long-term contracts are likely to separate the commodity value of the fuel from the regulatory value associated with emissions reductions and compliance with European legislation.
Public support would nevertheless remain necessary during the early stages of market development. Although production costs continue to decline, advanced renewable fuels generally remain more expensive than their fossil equivalents. Contracts for Difference (CfDs) provide one mechanism for bridging this gap by compensating producers for part of the difference between renewable fuel production costs and prevailing fossil fuel prices. As production costs decline or carbon prices increase, public support automatically falls, allowing the market to gradually become self-sustaining.
Harmonise Regulatory and Technical Standards
The commercial integration of Indian production with European demand ultimately depends upon regulatory compatibility rather than production capacity alone. Fuels certified under one jurisdiction must be capable of satisfying technical, environmental and traceability requirements in the other without requiring duplicative testing or certification.
India’s role extends beyond providing feedstock. Public policy can improve the commercial viability of an export-oriented biofuels corridor by reducing development risk, improving market efficiency and providing long-term regulatory certainty. The government could establish a limited number of Green Fuel Export Zones near major ports or feedstock-producing regions.
This requires convergence across a broad range of regulatory frameworks, including fuel-quality specifications, sustainability certification, lifecycle greenhouse-gas accounting, waste and residue classification, customs procedures, guarantees of origin, anti-double-counting rules and book-and-claim systems for aviation and maritime fuels. Regulatory fragmentation increases transaction costs, delays project development and reduces investor confidence, even where production technology itself is mature.
Recent policy developments provide a foundation for greater alignment. The European Union has already introduced mandatory SAF blending under ReFuelEU Aviation and progressively tightening greenhouse-gas intensity limits under FuelEU Maritime. India has likewise announced indicative sustainable aviation fuel blending targets of 1% in 2027, 2% in 2028 and 5% in 2030, while amending its aviation fuel regulations in 2026 to permit SAF-blended fuels. Although the scale of the two markets differs substantially, both jurisdictions are moving towards comparable regulatory structures centred on certified low-carbon fuels.
Operational rules would also require clarification. In many cases, it is likely to be more efficient for neat SAF to be produced and certified in India before being transported separately and blended at European fuel terminals immediately prior to distribution. Such an approach simplifies certification, preserves traceability and avoids transporting large quantities of fossil kerosene unnecessarily.
How India Could Help
India’s role extends beyond providing feedstock. Public policy can significantly improve the commercial viability of an export-oriented biofuels corridor by reducing development risk, improving market efficiency and providing long-term regulatory certainty.
Rather than dispersing support across numerous projects, the government could establish a limited number of Green Fuel Export Zones near major ports or feedstock-producing regions. These clusters would combine industrial infrastructure, streamlined permitting, coordinated land acquisition, dedicated rail links, certified storage, common testing laboratories and sustainability certification, generating economies of scale while reducing administrative costs for both developers and regulators. The National Single Window System could be used to coordinate central and state approvals, although it would not replace the substantive decisions of environmental, industrial and other competent authorities.
The first generation of commercial-scale advanced biorefineries will also face financing constraints owing to technology risk and limited operating track records. Rather than permanently subsidising production, public financial institutions could mobilise private capital through targeted instruments such as viability-gap funding, subordinated debt, loan guarantees, concessional finance, foreign-exchange facilities and grants for demonstration plants. Programmes such as the amended Pradhan Mantri JI-VAN Yojana and the Indian Renewable Energy Development Agency’s SAF loan policy already exist to support renewable fuel pathways; an export-oriented corridor would extend this approach to facilities capable of meeting international sustainability standards.
Europe’s principal contribution should be to reduce regulatory, revenue and financing risk. ReFuelEU Aviation and FuelEU Maritime already create long-term demand for renewable and low-carbon fuels, but project developers face uncertainty over the interpretation of eligible feedstocks, lifecycle greenhouse-gas calculations, certification systems and reporting requirements.
Long-term competitiveness will depend equally on efficient biomass markets. State governments can facilitate organised residue supply chains linking farmers, forest communities, producer organisations and biorefineries through standardised contracts, transparent pricing and investments in baling equipment, storage, rural logistics, fire prevention, digital traceability and working capital. These measures would reduce transaction costs while improving feedstock quality and supply reliability without distorting market incentives.
Finally, large-scale investment requires regulatory stability. Biofuel projects financed over two decades cannot readily absorb sudden changes in export policy or domestic allocation requirements. Granting qualifying projects long-term export rights for a defined share of certified production — conditional on India’s domestic blending obligations being met — would reduce regulatory risk, improve access to long-term capital and reinforce a principle common to all capital-intensive infrastructure: predictable regulation is often more valuable than generous subsidies.
The European Contribution
Europe’s principal contribution should not be to relax sustainability standards, but to reduce regulatory, revenue and financing risk. ReFuelEU Aviation and FuelEU Maritime already create long-term demand for renewable and low-carbon fuels, but project developers continue to encounter uncertainty concerning the interpretation of eligible feedstocks, lifecycle greenhouse-gas calculations, certification systems and reporting requirements. The European Commission itself has acknowledged that promoters face difficulties interpreting the eligibility of certain advanced bio-feedstocks and has announced further guidance in connection with the revision of Implementing Regulation (EU) 2022/996.
Demand creation must also be matched by commercial bankability. Advanced biofuels remain more expensive than fossil alternatives during early deployment, while fragmented procurement limits the ability of individual airlines, shipping companies and industrial consumers to underpin large-scale investment. Europe could address both challenges by extending technology-neutral support mechanisms — including competitive Contracts for Difference and reverse auctions — to imported fuels meeting identical sustainability standards, while aggregating demand through long-term procurement by airport fuel consortia, port authorities, defence organisations and other public bodies. Multi-year tenders would provide the predictable revenue streams needed to finance commercial-scale production while maintaining competition based on emissions reductions, security of supply, technological maturity and overall cost-effectiveness rather than the geographic origin of production.
The most credible starting point is likely to be a western India-northwest Europe corridor centred on Maharashtra and Gujarat, connected through ports such as Mumbai, Mundra and Hazira to Rotterdam, Antwerp and Marseille.
Finally, European public financial institutions — including the European Investment Bank, national development banks and export credit agencies — could accelerate investment through development grants, political risk insurance, loan guarantees and export-credit financing for projects involving European technology providers or long-term offtakers. Such blended finance is particularly valuable during feasibility studies, front-end engineering design and first commercial deployment, when technology and construction risks remain too high for conventional infrastructure lenders despite favourable long-term market fundamentals.
Conclusion
The emergence of an India–Europe biofuels corridor would represent more than a new renewable fuel supply chain. It would establish a new model of industrial cooperation in which Europe’s comparative advantages in engineering, finance and advanced process technologies are combined with India’s resource base, manufacturing capabilities and expanding bioeconomy.
Three complementary bargains would underpin such a partnership. India would provide abundant sustainable feedstocks, competitive industrial production and predictable export conditions. Europe would provide long-term regulatory demand, recognised certification systems, patient capital and stable offtake agreements. Together, both sides would share the cost and risk of developing the first generation of internationally integrated biorefineries.
The most credible starting point is likely to be a western India–north-west Europe corridor centred on Maharashtra and Gujarat, connected through ports such as Mumbai, Mundra and Hazira to Rotterdam, Antwerp and Marseille. These regions combine large biomass catchments, established industrial infrastructure and direct access to two sectors — aviation and maritime transport — where European decarbonisation is already driven by binding legislation rather than voluntary commitments.
In an increasingly fragmented global energy system, the strategic question is no longer simply where renewable fuels can be produced most efficiently. It is whether major economies can construct trusted, rules-based supply chains capable of replacing fossil fuel trade with equally reliable low-carbon alternatives. An India-Europe biofuels corridor offers one of the clearest opportunities to do so.
Basile Marin
The writer is CEO and co-founder of Expansion Partners, an institutional investor in technology companies and bioenergy project development firms. Since 2021, he has been a regular contributor to Forbes France, Conflits, L’AGEFI and the Revue Politique et Parlementaire. In India, he publishes in The Diplomatist.
