Latin America SAF Gap Drives Corporate Scope 3 Demand Pooling

Latin America's transition to sustainable aviation fuel faces a structural bottleneck due to zero commercial-scale refining capacity despite abundant regional feedstocks. To overcome high SAF green premiums and meet CORSIA mandates, carriers like Aeroméxico are partnering with corporate giants to pool Scope 1 and Scope 3 emissions reductions. This development impacts airlines, energy firms, multinational exporters, and air cargo logistics across Mexico's nearshoring corridors.

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Global sustainable aviation fuel (SAF) production is projected to reach 2.4 million tons in 2026, accounting for 0.8% of worldwide jet fuel consumption and representing an annual procurement cost of US$4.3 billion for commercial carriers. Despite its current scarcity, SAF stands as the primary technical lever for decarbonizing civil aviation, offering up to an 80% reduction in lifecycle greenhouse gas emissions compared to conventional petroleum-based jet fuel. However, achieving the global airline industry's net-zero carbon commitment by 2050 requires annual SAF production to scale to 500 million tonnes — a 200-fold expansion that demands unprecedented capital deployment across raw material supply chains, refining infrastructure, and green financing mechanisms.

In Mexico, flag carrier Aeroméxico has mapped a long-term decarbonization pathway where SAF must constitute 63% of total fuel burn by 2050. Currently, SAF accounts for just 1.6% of the carrier's fuel mix, reflecting a broader structural bottleneck across Latin America, where commercial-scale SAF refining capacity remains non-existent. To bridge this supply gap and stimulate domestic demand, Aeroméxico partnered with Grupo Bimbo and Compartamos Banco, launching Latin America's first corporate travel program designed to co-fund SAF procurement by linking the airline's Scope 1 operational emissions reductions with corporate partners' Scope 3 business travel accounting.

Latin America's transition to sustainable aviation fuel is trapped in a structural paradox: while the region possesses world-class agricultural and industrial waste feedstocks, the total absence of domestic commercial refining infrastructure forces regional airlines to face prohibitive green premiums or export raw materials abroad. Consequently, voluntary corporate Scope 3 demand pooling across passenger travel and nearshoring air cargo supply chains will serve as the primary engine for regional market liquidity until industrial refining assets and statutory frameworks align under international mandates like CORSIA.

The Raw Material Paradox: Biomass Wealth vs. Refining Vacuum

Latin America holds one of the world's most abundant biomass reserve profiles, generating millions of tons of agricultural residue, sugarcane ethanol, used cooking oil (UCO), and animal tallow annually. Per World Economic Forum data, global feedstock availability is sufficient to cover regional decarbonization requirements toward 2050.

However, this biological wealth contrasts sharply with a complete absence of domestic commercial refining infrastructure. Processing raw biomass into drop-in synthetic paraffinic kerosene (SPK) requires advanced refining pathways, such as Hydroprocessed Esters and Fatty Acids (HEFA) or Alcohol-to-Jet (AtJ) technology. Currently, Mexico possesses zero operational commercial-scale SAF plants. While federal authorities have initiated exploratory discussions with international energy partners to evaluate technology sharing, state energy company PEMEX remains constrained by financial debt and capital commitments to conventional oil refining at the Olmeca facility in Dos Bocas.

This infrastructure deficit creates a severe market inefficiency. Without local processing facilities, Mexican feedstock collection networks export unrefined waste oils and tallow to processing hubs in the United States and Europe, where policy mechanisms — such as the US Inflation Reduction Act (IRA) clean fuel production tax credits — subsidize refining margins. Mexican carriers seeking to procure certified SAF must subsequently import finished fuel at steep international logistics costs, paying a green premium two to four times higher than standard Jet-A.

Scope 3 Demand Pooling Across Travel and Cargo Supply Chains

In developed aviation markets, regulatory mandates and direct government subsidies accelerate SAF adoption. The European Union's ReFuelEU Aviation regulation enforces blending mandates starting at 2% in 2025 and scaling to 70% by 2050. In contrast, Mexico and broader Latin America operate in a policy environment lacking direct financial subsidies or enforceable blending quotas. To overcome the green premium without jeopardizing operating margins, airlines are developing corporate co-funding models.

The corporate alliance established between Aeroméxico, Grupo Bimbo, and Compartamos Banco provides a commercial blueprint for emerging markets. Under this framework, corporate clients commit capital to purchase SAF environmental attributes tied to employee business travel. Aeroméxico claims direct Scope 1 operational emissions reductions under civil aviation reporting, while corporate partners claim verified Scope 3 carbon reductions across their value chains.

This demand-pooling mechanism addresses the fundamental liquidity barrier facing regional SAF deployment. According to the Air Transport Action Group, scaling global SAF production requires up to US$1.5 trillion in cumulative capital investment for 5,000 to 7,000 production facilities worldwide. Co-funding models mitigate price volatility by sharing the green premium across major corporate energy consumers.

CORSIA Compliance, Global Benchmarks, and Regulatory Exposures

As international climate regulations tighten, Latin American carriers face escalating financial risks under ICAO's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Under ICAO CORSIA Phase 1 (2024–2026), baseline requirements are set at 85% of 2019 levels, creating mandatory offsetting obligations for international flights between participating states. In official regulatory filings, Aeroméxico submitted CORSIA emissions compliance reports to Mexico's Federal Civil Aviation Agency (AFAC).

The absence of regional SAF refining capacity leaves Latin American airlines vulnerable to rising compliance costs. The International Air Transport Association (IATA) warned that green compliance costs and fleet delivery constraints will compress airline profit margins globally through 2026. For Latin American carriers operating in price-sensitive consumer markets, relying exclusively on carbon credit offsets rather than physical SAF blending exposes balance sheets to carbon market price volatility.

International benchmarks illustrate the competitive gap between global carriers and Latin American operators. According to corporate sustainability disclosures, KLM reached a 4.6% SAF share in its global fuel mix in 2025, while International Airlines Group (IAG) utilized over 291,000 tonnes of SAF (3.3% of its total fuel burn), Lufthansa Group achieved 1.5%, and United Airlines recorded approximately 0.7%. Without local refining capacity, Latin American carriers risk falling behind global peers as CORSIA compliance rules become more stringent.

Capital Allocation and the 2050 Decarbonization Equation

To achieve net-zero carbon emissions by 2050, commercial airlines must balance fleet modernizations with alternative fuel adoption. While modern aircraft inductions yield immediate fuel efficiency gains, fleet replacement alone cannot bridge the long-term decarbonization deficit. In its annual ESG disclosures, Aeroméxico reported a 10% emissions reduction compared to pre-pandemic baselines through Boeing 737 MAX and 787 Dreamliner inductions.

However, aeronautical engineering constraints dictate that thermodynamic fleet efficiency improvements hit a structural ceiling once young aircraft integration stabilizes, leaving SAF blending to deliver 63% of Aeroméxico's required emissions reductions by 2050.

This transition imposes severe capital requirements across a sector navigating tight financial margins. While global airline profitability maintains steady baseline performance — with IATA having projected global industry net profits of US$41 billion in 2026 on revenues of US$1.053 trillion — Latin American carriers operate under narrower net profit margins and elevated foreign exchange volatility. Passing green premiums directly onto passenger fares risks depressing traffic, making corporate co-funding, domestic refining investments, and public-private risk-sharing mechanisms essential to securing Mexico's role as a competitive, low-carbon hub for global trade and transport.

Mexico's pathway toward sustainable aviation fuel illustrates the broader economic challenges facing emerging markets during the global energy transition. While feedstock abundance provides a strong foundational advantage, converting biological resources into commercial aviation decarbonization requires bridging the industrial refining gap and establishing permanent capital-sharing mechanisms. By leveraging corporate Scope 3 partnerships, advancing regional trade alignment under USMCA, and structuring public policy around bio-energy investment, Mexico can secure its position as a competitive, low-carbon hub for global trade and transport.