With Sustainable Aviation Futures LATAM taking place in São Paulo this week, the spotlight is on the role Latin America plays in the energy transition of civil aviation. Being one of the fastest-growing regions in terms of passengers, air travel is expected to more than triple by 2050 across Latin American countries. This growth by itself carries a great economic potential for the entire region, as air transport already supports 8.3 million jobs or nearly 3% of all employment according to ATAG’s report Aviation: Benefits Beyond Borders. The number of people directly employed in the sector is forecast to grow at 2.3% annually and we estimate that by 2043 air transport and the tourism it facilitates will support up to 15 million jobs in Latin America.
But this is not the only growth potential there is. There is a great opportunity for the region to become a critical player in the ramp-up of sustainable aviation fuel (SAF). According to the industry’s Waypoint 2050 analysis, Latin America could contribute between 10% and 15% to the global SAF supply by 2050, or up to 54 million tonnes, bringing with it jobs, energy security and energy independence.
A team of MIT researchers recently confirmed this potential in a report analysing aviation decarbonisation options in Latin America. Focused on Brazil, Chile, Colombia, Ecuador, Mexico and Peru, the MIT team projects a jet fuel mix of 65% SAF in Latin America by 2050, which would in turn reduce aviation emissions by about 60%. The most promising near-term production pathways are feedstocks such as sugarcane-based ethanol, corn-based ethanol, and palm oil- or soybean-based hydro-processed esters and fatty acids (HEFA). While these methods use current farming systems and structures, the ramp-up of SAF still comes at a high cost, which is the most pressing issue to solve over the next years: MIT estimates that between 2025 and 2050 a total of $204 billion will be required across all six countries to build new SAF producing plants.
Brazil can serve as a blueprint for the region
As Latin America’s largest country, Brazil is already one of the world’s leading producers of ethanol made from sugarcane. The country has developed a strong biofuel industry over the past years, largely driven by its ProBioQAv programme, a strategic policy initiative of the Brazilian government to replace petroleum-based fuels with ethanol. Brazil’s sugarcane ethanol industry provides a solid foundation for SAF production and gives the region a head-start in the world to meet growing global demand for SAF.
Other Latin American countries, such as Argentina, also produce significant amounts of biofuel. The country is one of the top producers of biodiesel from soybean oil. Similarly to Brazil, Argentina has plenty of agricultural land and good climate conditions for growing the crops used in biofuel production.
But feedstock availability is only part of the equation. What is needed in addition is the infrastructure to convert natural resources into SAF, namely the construction of production sites or the modification of existing plants. Secondly, it is about incentivising SAF production at scale by lowering the price per litre and creating a competitive alternative to conventional jet fuel. As of 2024, Latin America’s jet fuel prices hover near $0.70 per litre, while SAF production costs in the region can range from around $1.11 to $2.86 per litre. Now is the time for governments to set the right policy frameworks and ensure scalability, but also a responsible approach to feedstock allocation for SAF production. This means prioritising feedstocks that do not compete with food production, avoiding deforestation, and protecting biodiversity. Responsible policies and frameworks are essential to guaranteeing that SAF delivers both environmental and economic benefits.
Brazil’s recent commitment to a SAF mandate by 2027, coupled with the National Bank for Economic and Social Development’s (BNDES) financing of $1.1 billion for sustainable fuel projects, could serve as a blueprint for other countries in the region to ensure short-term government action evolves into policies that enable real long-term progress. With the right framework in place, international investors will be encouraged to put money into new SAF projects, creating jobs and lifting rural economies where feedstock is grown.
A collaborative approach to decarbonisation
Asia, Europe and North America are accelerating their own SAF initiatives and Latin America needs to act quickly to stay ahead of the curve. The region cannot rely on feedstock availability alone. To truly lead in the ramp-up of SAF, Latin American countries must focus on ensuring scalability through both public and private investments in infrastructure and by providing the ground for becoming a research and innovation hub to scale new production pathways.
To support this development, countries across the region need to work closely together, ensuring the flow of information between them and the exchange of best practices. A unified decarbonisation strategy will help ensure competitiveness and economies of scale. And while SAF is undoubtedly critical to decarbonising aviation, the collaborative action should not only focus on fuel production. We must not ignore other important solutions such as technological advancements or operational improvements. We cannot afford to focus on one area at the expense of another. Every solution matters, and we need to ensure we are making progress across the board.
As we look to the future, Latin America’s role in the decarbonisation journey of civil aviation is a critical one and carries enormous economic potential for the region. The Sustainable Aviation Futures LATAM event in São Paulo will provide an opportunity for industry leaders to come together and discuss how we can push the boundaries of what is possible. ATAG is contributing to that discussion, and we are looking forward to hosting another event as part of our series in partnership with Bloomberg to facilitate discussions with the finance community. These events that have taken us from London, to New York, and Singapore provide an important platform to focus on the critical role of investment in scaling up SAF production, bridging the gap between industry needs and financial opportunities.