Uniting the Industry to Develop LATAM’s SAF Market
Latin America is uniquely positioned to play a pivotal role in the global SAF market. As the industry faces mounting pressure to decarbonise, regions with abundant sustainable feedstocks, established refining infrastructure, and emerging policy support are critical to scaling SAF production, and LATAM offers all three advantages.
Access to Feedstocks
A significant challenge in SAF production has historically been access to sustainable and cost-effective feedstocks. LATAM’s vast agricultural landscape provides an abundant and diverse supply of biomass, agricultural residues, and waste oils for current and emerging SAF production pathways.
Brazil offers a diverse portfolio of SAF production methods. The country is already a leader in biofuels production, particularly with ethanol, and the country is also progressing towards AtJ technology, which is especially promising due to existing infrastructure and feedstock availability. Additionally, HEFA (the most widely used SAF pathway currently) can be sustained through waste oils and fats from Brazil’s robust agricultural and food industries. Still more opportunities lie in lignocellulosic biomass, including agricultural waste and forest residues, which could be converted into SAF through technologies like Fischer-Tropsch.
Existing Infrastructure and Industrial Expertise
As already alluded to, benefits from a well-established refining sector capable of adapting to SAF production. Countries such as Brazil, Argentina, Mexico, and Colombia have significant refining infrastructure, which could be repurposed or enhanced to facilitate SAF production.
Petrobras, YPF, Ecopetrol, and PEMEX are key regional players with the technical expertise necessary to transition their refineries towards SAF production. The possibility of co-processing within existing refineries could accelerate SAF output with minimal additional infrastructure investment. Several refineries in the region already produce renewable diesel, which can serve as a stepping stone toward SAF production.
Utilising this infrastructure, Brazil alone could scale SAF production to 6,000 barrels per day (bpd) by 2030, and 700,000 bpd by 2050 which would be almost 35% of projected global SAF production.
SAF Policy and Investment
In October 2024, Brazil made a major move toward establishing itself as a SAF leader by passing the region's first SAF mandate, effective from 2025. As part of the Fuel for the Future program, the Brazilian Senate aims to expand the use of renewable fuels, including SAF. This initiative intends to:
Increase biofuel blending levels from 27.5% to 30%.
Establish a national SAF program, requiring airlines to reduce greenhouse gas emissions starting in 2027, with a 1% reduction in 2027 and 10% by 2037.
This shift aligns with Renovabio, the CORSIA program, which will increase the international liquidity of decarbonisation credits, making it easier for international airlines and fuel producers to purchase Brazilian SAF.
In addition to policy support, Brazil’s development bank, BNDES and funding agency FINEP have committed $1bn to SAF projects, investing in research, technological development, and innovation to further establish SAF production capabilities.
Opportunities Beyond Brazil
While Brazil is leading the charge, other LATAM countries are also making strides toward SAF production:
Colombia is exploring SAF production from agricultural industrial waste and plans to launch its first SAF plant by the end of 2025, producing 50 million gallons of SAF annually.
Shell and ECB Group Paraguay have signed a multi-year agreement to provide 400,000 million tons per annum of renewable jet fuel starting late last year.
Argentina is set to invest $200m in the country’s first SAF plant through Grupo Bahia Energia.
Uruguay’s ANCAP is targeting 137 MTPA of SAF production in Montevideo.
These projects set the region in good stead to become a key player in the SAF market, leveraging their regional strength in biofuels, agricultural waste, and established infrastructure.
Market Challenges and Opportunities
Despite these promising developments, the SAF market in LATAM faces several challenges, as seen with the SAF market around the world:
Financing: The high costs associated with developing SAF projects remain a barrier, as lenders are hesitant to fund perceived high-risked projects.
Policy and Incentives: While countries like Brazil have made substantial progress, a cohesive approach across LATAM would reduce regulatory uncertainty and attract investment.
Demand Signals: Airlines in the region are not yet providing enough demand signals to incentivise SAF producers to commit to large-scale projects.
The Path Ahead
With global aviation companies seeking long-term SAF supply agreements, the region’s ability to leverage its advantages will define its role in the future of SAF. The upcoming Sustainable Aviation Futures LATAM conference will provide a platform for industry leaders, policymakers, and investors to align on strategies and investments needed to scale SAF production in the region.
The next decade will determine the future of SAF in LATAM. The resources are already in place, now it’s time to seize the opportunity and establish the region as a global SAF powerhouse