SAF investment in Latin America constrained by costs, policy gaps: ALTA panel

Investment in sustainable aviation fuel in Latin America remains constrained by high costs, limited policy certainty, and a lack of long-term revenue visibility, according to panelists at the ALTA Fuel & Sustainability Conference.

The region has strong structural advantages, including feedstock availability and growing aviation demand, but continues to face a gap between ambition and implementation, Pedro de la Fuente, senior manager of external affairs and sustainability at the International Air Transport Association, said during the conference, held in Quito, Ecuador, April 15-17.

De la Fuente said the challenge is to move from policy signals to execution without undermining airline economics.

From an airline perspective, Renata Fonseca, director of legal, compliance, privacy and institutional relations at GOL Linhas Aéreas said affordability remains the main barrier to SAF adoption.

"SAF is two to three times more expensive than regular fuel," Renata said, adding that fuel accounts for about 30% of airline costs in Brazil, limiting the ability to absorb additional SAF-related costs.

Speakers said that while Brazil has introduced regulatory measures such as blending mandates, the region overall still lacks sufficient supply, incentives and clarity to support large-scale deployment.

Elise Fox, director of sustainability of World Fuel Services, said global SAF markets have only recently begun to scale, with growth largely driven by incentive frameworks, particularly in the US.

Policy support must extend across the full value chain, including feedstock, certification and logistics, rather than focusing only on fuel production, Fox said, adding that investment in conventional jet fuel infrastructure -- such as storage and pipelines -- will also be required to support SAF distribution.

Paula Daroca, head of international business growth for Latin America and the Caribbean at Airbus, said SAF is expected to play a central role in aviation decarbonization, potentially accounting for more than half of emissions reductions by 2050.

"SAF is here to stay," Daroca said.

However, Daroca said one of the main constraints for SAF investment is the lack of long-term certainty, noting that production projects require multi-decade investment horizons while aviation fuel procurement remains short-term.

Speakers said this mismatch limits capital deployment, as investors require predictable revenue streams before committing to projects.

Panelists also said the SAF premium cannot be absorbed solely by airlines, particularly in price-sensitive markets, and that scaling SAF will require coordinated action across governments, producers and industry participants.

SAF should also be viewed as an economic and energy opportunity for the region, de la Fuente added.

Platts, part of S&P Global Energy, assessed the SAF premium with credits detached in California at 68.55 cents/gallon on April 20, down 87.50 cents, or 56.1%, from 156.05 cents/gal on April 13.