Building Latin America's SAF Market

July 10, 2026

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by Jefferson dos Santos Estevo* (Advanced Biofuels USA) South America is gradually emerging as one of the world's most promising regions for sustainable aviation fuel (SAF) development. Abundant biomass resources, expanding renewable electricity generation, and the growing engagement of national oil companies are creating the foundations for a new regional market.

Co-processing in Brazil

Petrobras, Brazil's state-controlled mixed-capital energy company, reached a new milestone by commercializing its first batch of CORSIA-certified SAF produced through the co-processing of certified soybean oil at the Presidente Bernardes Refinery (RPBC) in Cubatão, São Paulo.

The fuel, supplied to Bunge, represents Petrobras' first commercial SAF sale and demonstrates that existing refinery infrastructure can be adapted to produce lower-carbon aviation fuels through co-processing. Although renewable feedstocks currently account for only about 1% of the process, the initiative marks an important step in the company's broader decarbonization strategy. As Latin America's largest aviation market, with more than 118 million domestic passengers annually, Brazil provides a strong foundation for scaling SAF production while also positioning Petrobras to serve future export markets.

Role of National Oil Companies

Brazil's announcement reflects a broader regional trend in which state-controlled energy companies are playing an increasingly strategic role in SAF development. Petrobras joins Ecopetrol (Colombia), ENAP (Chile), ANCAP (Uruguay), YPF (Argentina), and potentially YPFB (Bolivia) as national oil companies integrating sustainable aviation fuels into their energy transition strategies. Although each country is pursuing different technological pathways, the growing leadership of state-owned enterprises is becoming one of the defining characteristics of South America's emerging SAF market.

Supplying Mercosur and Global Aviation Markets

According to the latest ICAO data, the following are the leading aviation markets among the member and associate states of Mercosur

Argentina presents one of the region's most diversified SAF strategies. Through the BioSantaFe initiative, YPF is supporting the conversion of an existing refinery into a renewable fuels complex capable of producing HEFA and renewable diesel from soybean oil, animal fats, and other lipid feedstocks. The project leverages Argentina's position as one of the world's largest soybean producers while making use of existing refining infrastructure.

At the same time, the GreenSinnergy project in Patagonia aims to develop one of South America's largest Power-to-Liquid (PtL) facilities, producing synthetic aviation fuel from renewable hydrogen and captured carbon dioxide, taking advantage of the region's world-class wind resources. With an aviation market serving approximately 45 million passengers annually, Argentina combines strong domestic demand with significant export potential for both bio-based and synthetic SAF.

Colombia is following a similar path through Ecopetrol. The company has expanded research and pilot initiatives involving renewable aviation fuels while assessing multiple production pathways, including co-processing and HEFA technologies.

Colombia is the region's largest aviation market, handling more than 55 million passengers annually.

As one of Latin America's leading producers of palm oil, the country possesses well-established agro-industrial infrastructure that provides favorable conditions for the deployment of HEFA technology, which is expected to play a central role during the initial phase of SAF. This production potential has been further strengthened by recent industry initiatives, including a five-year technical and scientific cooperation agreement signed in July 2025 between the National Federation of Oil Palm Growers (Fedepalma) and LATAM Airlines to promote SAF development in Colombia .

As mentioned, Ecopetrol has emerged as the principal driver of Colombia's SAF strategy, playing a role comparable to that of Petrobras in Brazil. The state-owned company has announced plans to invest between USD 500 million and USD 700 million in a SAF production facility at the Barrancabermeja refinery, the country's largest refining complex. The project is expected to begin operations by 2030 with an estimated production capacity of approximately 6,000 barrels per day.

Complementing this effort, LanzaJet and BioD are conducting a feasibility study for an ATJ facility that would convert ethanol derived from agroforestry residues into SAF, with commercial deployment targeted for 2029 (LanzaJet, 2025). Together, these initiatives position Colombia to supply both its growing domestic aviation sector and international markets while reinforcing the strategic role of Ecopetrol in the country's long-term energy transition.

Chile has adopted one of South America's most comprehensive SAF strategies by integrating aviation decarbonization into its National Green Hydrogen Strategy and the 2023–2030 Action Plan, both designed to establish a competitive renewable hydrogen industry for domestic consumption and exports. Institutional progress has been reinforced through the establishment of the SAF Roundtable (Vuelo Limpo), a public–private governance platform that developed the country's first National SAF Roadmap. The roadmap establishes a target of supplying 50% of national aviation fuel demand with SAF by 2050 and is organized around five strategic pillars: capacity building, regulatory development, market creation, ecosystem strengthening, and technological innovation.

Rather than relying primarily on agricultural feedstocks, the country is prioritizing synthetic aviation fuels produced from low-emission hydrogen (LEH) and captured carbon dioxide. Chile's exceptional solar resources in the Atacama Desert and world-class wind potential in the Magallanes region provide ideal conditions for renewable hydrogen production, positioning the country as a potential global supplier of e-fuels. Although its aviation market is relatively modest, handling approximately 30 million passengers annually, Chile's strategy is clearly oriented toward supplying both domestic demand and international markets.

Empresa Nacional del Petróleo (ENAP), Chile's state-owned energy company, is leading this transition through multiple technological pathways. In the near term, the company is evaluating the co-processing of vegetable oils at its existing refineries, with commercial SAF production expected from 2027. At the same time, ENAP is advancing Fischer-Tropsch (FT) and PtL projects based on renewable hydrogen produced in Magallanes, while strengthening strategic partnerships with HIF Global to accelerate the commercialization of synthetic aviation fuels.

Between 2025 and 2029, ENAP plans to invest approximately US$3.78 billion in sustainable fuels, refinery modernization, and logistics infrastructure, reinforcing its role as the country's principal driver of SAF development.

Complementing ENAP's efforts, HIF Global continues to expand the Haru Oni project in southern Chile, one of the world's leading e-fuels initiatives. The company is integrating direct air capture (DAC) technology capable of removing approximately 600 tonnes of carbon dioxide annually, combining the captured CO₂ with renewable hydrogen to produce synthetic fuels, including e-SAF.

Together, these initiatives position Chile at the forefront of Power-to-Liquid development in Latin America. However, the long-term expansion of the domestic SAF market will likely depend on stronger policy support, including blending mandates or other regulatory mechanisms capable of stimulating commercial demand.

Paraguay represents perhaps the clearest example of an export-oriented SAF strategy. Unlike most neighboring countries, its principal project is being led by private capital through ECB Group's Omega Green biorefinery in Villeta. The facility, with planned investments exceeding US$1 billion, will produce renewable diesel, SAF, and green naphtha using soybean oil, animal fats, and waste lipids while integrating renewable hydrogen produced with Paraguay's abundant hydroelectric resources.

The country's aviation market remains relatively small, with just over 1.3 million passengers passing through Asunción's Silvio Pettirossi International Airport in 2025, making exports the obvious commercial destination for production. The project has therefore been designed primarily to supply Europe and North America rather than domestic airlines.

Like Chile, Uruguay has adopted a development pathway centered on LEH and synthetic fuels rather than relying on a large domestic aviation market or abundant agricultural feedstocks. Instead of competing through scale, both countries seek to leverage their highly renewable electricity matrices to position themselves as future exporters of sustainable aviation fuels. With fewer than five million passengers annually, Uruguay's aviation market is relatively small, making exports a central component of its long-term SAF strategy.

ANCAP, Uruguay's state-owned energy company, is leading this transition through the development of a HEFA project at the La Teja refinery in partnership with its biofuels subsidiary ALUR. In parallel, private companies are advancing complementary initiatives, including the NovaSAF 1 project, which will produce synthetic SAF through the Power-to-Liquid pathway using renewable electricity and biogas, and Avalon BioEnergy's proposed HEFA facility based on camelina and green hydrogen. Together, these initiatives illustrate Uruguay's strategy of combining state-led industrial development with private investment while leveraging its renewable energy resources to position itself as a future exporter of sustainable aviation fuels.

Bolivia remains at an earlier stage of development but should not be overlooked. The country has considerable renewable electricity resources, an expanding bioethanol industry. While no commercial SAF projects have yet been announced, the state-owned company YPFB possesses the refining infrastructure, aviation fuel distribution network, and technical capabilities that could make it the natural vehicle for future SAF investments. Bolivia's aviation market remains modest compared with its regional peers, but its resource base and institutional structure suggest significant long-term potential should a national SAF strategy be adopted.

Two SAF Development Models

Taken together, these developments reveal that South America's SAF market is beginning to organize around two complementary models.

Brazil, Argentina, and Colombia are leveraging large domestic aviation markets together with strong national oil companies to build internal demand while developing production capacity.

Chile, Paraguay, and Uruguay, meanwhile, are positioning themselves primarily as export-oriented producers by exploiting abundant renewable resources and competitive production costs.

Bolivia remains a future opportunity, with YPFB well placed to assume a strategic role if national policies evolve toward sustainable aviation fuels.

Across all these countries, the emergence of state-owned energy companies as leading participants distinguishes South America's SAF transition from many other regions and may become one of the continent's principal competitive advantages in scaling sustainable aviation fuels over the coming decade.

* Jefferson dos Santos Estevo is a researcher in International Relations and Energy Transition at the Center of Excellence in Hydrogen and Sustainable Energy Technologies (CEHTES) at the Federal University of Goiás. FAPEG Research Fellow. He holds a doctorate in Social Sciences from the University of Campinas.

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vegetable oils Uruguay United Nations' International Civil Aviation Organization (ICAO) Transportation Fuels Policy soybeans South America repurpose Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel power-to-x/gas/liquid Paraguay palm oil oil refineries naphtha/bionaphtha/renewable naphtha markets/sales market forces Lipid Latin America Jetfuel (Sustainable Aviation Fuel (SAF)) Investing Hydrogen/Renewable Hydrogen HEFA (Hydro-processed esters and fatty acids) forest residue/waste Fischer-Tropsch/FT Financing ethanol/bioethanol environmental policy electrofuels (e-fuels) direct air capture defossilization CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) Colombia co-processing Chile Carbon Dioxide (CO2) carbon capture and utilization (CCU) Camelina Brazil Bolivia BioRefineries/Renewable Fuel Production biomass Biogas BioChemicals/Renewable Chemicals Big Oil/Oil Majors Aviation Fuel/Sustainable Aviation Fuel (SAF) Argentina animal fat alcohol-to-jet (ATJ)/ethanol-to-jet (ETJ) agroforestry Agricultural waste/residue

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