The closure of the Strait of Hormuz in 2026 underscored a reality that had long been apparent: energy security is no longer simply about oil and gas.
As Europe accelerates the decarbonisation of aviation and shipping while seeking to diversify energy imports, and India expands its advanced biofuels industry, the conditions are emerging for a strategic India–Europe biofuels corridor.
Such a corridor would not merely be a shipping route. It would be an integrated commercial and regulatory system connecting Indian feedstock production, certified biorefineries, export terminals, maritime transport, European import infrastructure and long-term buyers operating under EU renewable fuel mandates.
Demand Already Exists
Unlike many clean-energy initiatives, the principal demand driver already exists. The European Union has created legally binding markets for sustainable fuels through three complementary policies.
ReFuelEU Aviation requires increasing shares of sustainable aviation fuel (SAF) in European aviation fuel. FuelEU Maritime progressively lowers the greenhouse-gas intensity of fuels used by ships calling at EU ports. Meanwhile, the revised Renewable Energy Directive requires Member States by 2030 either to achieve a 29% renewable-energy share in transport or reduce transport fuel emissions intensity by 14.5%, including a combined 5.5% target for advanced biofuels and renewable hydrogen.
These mandates create predictable long-term demand that can underpin investment in export-oriented production.
The most promising products are sustainable aviation fuel, renewable methanol and bio-LNG for shipping, advanced ethanol for chemicals and SAF production, and biomethane exported either as liquefied bio-LNG, converted into methanol, or traded through certified book-and-claim systems.
India’s Comparative Advantage
The corridor should focus on advanced fuels produced from wastes and residues rather than food crops.
India possesses abundant agricultural residues including rice straw, cotton stalks, bagasse and cane trash, alongside forestry residues, bamboo, municipal organic waste, industrial waste streams and manure suitable for biomethane production. These feedstocks largely avoid the food-versus-fuel debate while qualifying for the highest sustainability categories under European legislation.
However, European market access depends as much on regulatory classification as on technical performance. Feedstocks associated with indirect land-use change or uncertain sustainability have little commercial value regardless of fuel quality. Every project must therefore demonstrate the origin and eligibility of its biomass from the outset.
Certification Must Begin at the Source
The greatest challenge is not production but traceability.
Every shipment must document feedstock origin, legal harvesting or waste status, transport distances, processing energy, methane emissions, lifecycle greenhouse-gas performance and an unbroken chain of custody from farm or forest to European customer.
European-recognised certification systems such as ISCC EU and REDcert already provide much of this framework, while the EU’s Union Database increasingly tracks renewable fuels throughout the supply chain.
India should therefore establish a national digital biomass registry compatible with European reporting standards. Farmers, cooperatives and aggregators would be registered through geolocation, weighbridge records, digital invoices and periodic audits, allowing certification to accompany the biomass throughout the production chain rather than being reconstructed after export.
State governments could further reduce transaction costs by creating pre-certified sourcing zones where residue availability, land status and default emissions factors have already been documented.
Consulting with Indian farmers
Indian farmers possess considerable political influence, but many remain deeply wary of reforms perceived as favouring large corporations. That mistrust was reinforced by the government’s controversial 2020 farm laws, which sought to expand private aggregation and contract farming but were ultimately withdrawn after sustained protests.
Against this background, imposing complex EU sustainability, traceability and certification requirements directly on millions of smallholders would create a major political and administrative obstacle.
The proposal’s success would therefore depend on the Indian government developing a domestic compliance architecture—based on producer organisations, public agencies, accredited aggregators and shared digital traceability systems—that absorbs the regulatory burden, protects farmers from liability and high costs, and allows them to participate without being directly exposed to the full complexity of EU regulation.
Developing Export Hubs
Rather than dispersing investment across numerous small facilities, India should concentrate production around two or three integrated export clusters.
A western corridor linking Maharashtra and Gujarat to ports such as Mumbai, JNPT, Mundra or Hazira would provide direct access to European energy hubs including Rotterdam, Antwerp and Marseille.
Each hub would require certified storage, fuel-quality laboratories, dedicated tanks for ethanol, methanol and SAF, bio-LNG liquefaction where appropriate, customs facilities, rail connectivity and infrastructure capable of preserving certified chain-of-custody throughout storage and loading.
Existing liquid-fuel infrastructure already accommodates ethanol and methanol with relatively modest adaptation, allowing an incremental expansion towards SAF, bio-LNG and synthetic fuels.
Creating Bankable Demand
Supply alone will not finance billion-euro biorefineries.
Projects require long-term purchase agreements with airlines, aviation fuel suppliers, shipping companies, industrial users and oil companies before construction begins.
Contracts should distinguish between three separate sources of value: the fuel itself, its verified greenhouse-gas reductions and its regulatory compliance value under European mandates. Pricing mechanisms linked to fossil fuel prices, carbon markets and compliance certificate values would distribute risk between buyers and producers.
Contracts for Difference could bridge the remaining green premium during the early years of commercial deployment, with public support declining automatically as technology matures and carbon prices increase.
The Role of Governments
India’s role is primarily to reduce project risk and organise supply.
Dedicated Green Fuel Export Zones could offer accelerated permitting, shared certification services, common storage infrastructure, port access and priority utilities. Public finance should focus on loan guarantees, subordinated debt, demonstration funding, feedstock mapping and farmer aggregation rather than permanent operating subsidies.
Equally important is export policy stability. Investors financing assets over 15 to 20 years require assurance that export rules will not change abruptly or that certified production will not suddenly be diverted to domestic markets.
Europe’s Responsibility is Different
The European Union should publish a clear regulatory pathway explaining how Indian agricultural residues, bamboo, biomethane, renewable methanol and advanced ethanol qualify under existing legislation. Greater regulatory certainty would significantly reduce financing costs without weakening sustainability standards.
European governments should also extend competitive support mechanisms—including Contracts for Difference—to imported fuels meeting identical environmental criteria. Otherwise, Europe risks mandating renewable fuels while supporting only domestic production.
Development finance institutions, including the European Investment Bank and national export-credit agencies, could further reduce financing costs through guarantees, political-risk insurance and concessional financing for projects involving European technology or offtake.
Conclusion: A Strategic Partnership
The greatest obstacles are unlikely to be technological. They are regulatory certainty, sustainable feedstock verification, long-term biomass availability and financing the remaining cost gap with fossil fuels.
Success therefore depends on three reciprocal commitments.
India must provide reliable feedstocks, stable export rules and fully traceable supply chains. Europe must provide recognised certification, long-term demand and support for the green premium. Both partners must jointly finance the first commercial plants and the shared infrastructure needed to connect them.
A Western India–North-West Europe corridor centred on Maharashtra and Gujarat, linked to Rotterdam, Antwerp and Marseille, represents the most credible starting point. It combines abundant biomass, industrial capability, established shipping routes and two European markets—aviation and maritime transport—where demand is already guaranteed by law.
Rather than simply exporting biofuels, such a corridor would establish a new strategic energy partnership, allowing Europe to diversify its renewable fuel supply while positioning India as one of the world’s leading exporters of advanced sustainable fuels.
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