Petrobras SAF plant delays deepen as Brazil's 2027 mandate looms

Petrobras is set to delay the start-up of all three of its dedicated sustainable aviation fuel plants by one year, pushing back a combined capacity of 45,000 barrels/day as Brazil's state oil company prepares a revised five-year business plan and with less than four months before the country's first binding SAF emissions targets take effect.

The delays, disclosed by Petrobras Director of Industrial Processes and Products William França during the ROG.e oil and gas congress in Rio de Janeiro, shift the timeline for dedicated SAF production from 2029-30 to 2030-31, according to multiple local media reports on Sept. 24.

The postponements come as Petrobras enters the final stretch of preparations for its new 2027-2031 business plan, due to be announced at year-end, and could affect the pace at which Brazilian SAF supply enters global aviation fuel trade flows at a moment when both domestic and international compliance clocks are running.

Co-processing bridges gap

Despite delays to dedicated units, Petrobras said it is making parallel progress on SAF production through co-processing of renewable feedstocks at existing refineries, a route that could partially offset the supply gap created by the postponements.

Co-processing is already operational at the Duque de Caxias Refinery, known as Reduc, in Rio de Janeiro state, the first Petrobras unit to receive ICAO ISCC-CORSIA sustainability certification for coprocessed SAF, having delivered its first 3,000 cubic meter batch to Tom Jobim International Airport.

França said the co-processing expansion underpins Petrobras' ability to meet near-term international compliance obligations.

The three dedicated SAF units facing delays represent the backbone of Petrobras' longer-term SAF ambitions.

The first unit, to be built at the Presidente Bernardes Refinery in Cubatão, São Paulo, carries a capacity of 16,000 b/d and will now start operations in 2030 rather than 2029. The Boaventura Complex in Itaboraí, Rio de Janeiro the largest of the three at 19,000 b/d and the Replan unit in Paulínia at 10,000 b/d have both been rescheduled to begin operations in 2031, slipping from an earlier target of 2030.

The delays put pressure on Brazil's emerging SAF supply architecture at a critical juncture.

Brazil's National Civil Aviation Agency, known as ANAC, opened a public consultation for the National Sustainable Aviation Fuel Program, known as ProBioQAV.

The ProBioQAV program, established under the Fuel of the Future Law requires airlines operating domestic flights to reduce aviation greenhouse gas emissions by 1% in 2027 through SAF use, rising progressively in subsequent years.

Mandate, market architecture

The regulatory timeline is tight as significant market questions remain unresolved with the mandate less than five months away, including how Brazil's domestic certification system will interact with CORSIA, whose mandatory phase also begins in 2027.

The decree allows producers to certify SAF either through the national system to be developed by Brazil's National Agency of Petroleum, Natural Gas and Biofuels, known as ANP, or under CORSIA-approved schemes, but does not establish whether Brazilian Sustainable Aviation Fuel Certificates, known as CS-SAF, will support CORSIA Eligible Fuel claims, creating potential uncertainty for airlines with both domestic and international compliance obligations.

The decree's inclusion of a book-and-claim structure has introduced a new pricing dynamic that market participants are still assessing. Under the framework, CS-SAF certificates can be traded independently from the physical fuel until retirement, potentially allowing physical SAF to be supplied where logistics are most efficient while airlines acquire certificates separately.

Brazil's government has moved to support demand-side uptake.

The Management Committee of the National Civil Aviation Fund approved Real 13.56 billion ($2.4 billion) in financing for domestic airlines with a portion specifically earmarked for purchases of SAF produced in Brazil.

Petrobras also completed the sale of 3.8 million liters of SAF produced with certified soybean oil supplied by agricultural trader Bunge to distributor Vibra, marking the world's first commercial batch of SAF made from soybeans carrying CORSIA Low ILUC Risk certification.

The fuel was produced at Reduc with 1% renewable content and distributed through Vibra's BR Aviation unit at Galeão International Airport.