Latin America Needs Incentives to Unlock SAF Potential: IATA

Latin America must develop a clearer understanding of its potential to produce sustainable aviation fuel (SAF) and implement public policies that enable industrial development, according to Daniel Chereau, Head Fuel, International Air Transport Association (IATA), in an interview with A21.

Chereau said global adoption of SAF will advance at different speeds depending on regional conditions and regulatory frameworks. “What is missing in Latin America is understanding the potential as producers and that governments establish public policies that deliver incentives” he said. 

He noted that Brazil is among the most advanced markets in the region, largely due to ethanol policies that have been in place for more than 50 years. “From that perspective, it is natural to expect Brazil to have a more developed SAF industry,” Chereau said.

In Mexico, discussions are underway with sugar producers amid declining demand for sugar and growing interest in biofuels as an alternative outlet. Chereau recalled that Mexico’s airport and fuel services agency, Aeropuertos y Servicios Auxiliares (ASA), previously developed a “flight plan” aimed at integrating stakeholders across the aviation value chain. Despite long-standing interest, he said the initiative lacked the incentive policies needed for implementation.

ASA, Mexico’s main jet fuel supplier, serves 52 airports and supplies more than 90% of the domestic market. The agency aims to promote clean energy use and support the aviation sector’s sustainable transition through the development and deployment of SAF. Infrastructure, Communications and Transportation Minister Jesús Esteva said at ASA’s 60th anniversary event that SAF implementation is “one of the biggest challenges” facing the aviation sector and that ASA must lead efforts to expand supply.

ASA Director Carlos Merino said the agency has launched a pilot project to blend imported SAF with conventional jet fuel, with a long-term goal of producing SAF domestically by 2030. In the near term, imports—likely from the United States—will remain necessary. Mexico also participates in ICAO’s CORSIA scheme, which includes a voluntary phase from 2024 to 2026 and mandatory targets from 2027 to 2035.

According to Guillermo Gómez, CEO, Consultoría Sustentable G2H, Mexico’s  primary SAF advantage lies in its biomass resources, including agricultural, forestry and urban waste, used cooking oils and potential power-to-liquid pathways. Sugarcane and sorghum stand out due to their scale and integration potential. Sugarcane alone covers more than 800,000 hectares across at least 15 states and supports the production of sugar, bagasse, bioelectricity and ethanol.

Despite this strong feedstock base, Mexico lacks pilot plants, industrial-scale projects and refineries adapted for SAF production, as well as intersectoral consortia. Gómez said this gap represents an opportunity to build capacity through research, financing and innovation, but would require coordinated efforts among government, industry and rural producers.

In Colombia, palm oil producers have expressed interest in entering the SAF market, a process Chereau described as similar to Mexico’s engagement with the sugar industry. Meanwhile, Chile has promoted green hydrogen as a key energy vector and set a target to begin SAF production by 2030, with projections extending to 2050. “Latin America is a vast region with regulatory fragmentation and differing sustainability policies, but there are emerging signals in certain countries,” Chereau said.

He emphasized that technology will be critical to lowering costs. Current SAF production relies primarily on hydroprocessed esters and fatty acids (HEFA) derived from used cooking oil. “Once we have the appropriate technology for each feedstock, costs will come down and prices will become more accessible,” he said.

Chereau added that incentive mechanisms should support technological development while leveraging the region’s role as a major producer of raw materials. “We are talking about incentives that favor technology development and take advantage of our position as feedstock producers,” he said.

According to the Latin American and Caribbean Air Transport Association (ALTA), the region’s lack of SAF production and active projects could increase aviation costs by up to US$318 billion. Mexico, despite being Latin America’s second-largest aviation fuel consumer, is expected to supply only about 3% of SAF demand by 2050.