Camila Fontana: The adoption of sustainable aviation fuel is accelerating worldwide and feedstock projects are being developed to meet this growing demand. Today we'll explore the global SAF market, Latin America's progress and how Argus supports transparency and pricing in this evolving space.
I'm Camila Fontana, Deputy Bureau Chief of the Argus office in Sao Paulo and joining me are Josh Vance, VP of Operations and Business Development focused on SAF and biofuels, and Lucas Boacnin, Business Development Manager focused on energy transition. So let's start with Josh and the big picture. What's happening globally in SAF markets?
Josh Vence: Globally, SAF adoption is accelerating. In Europe, blend mandates are tightening, countries are moving towards a 2% SAF blend by 2025, higher targets by 2030. In the US, tax credits under the Inflation Reduction Act have been incentivizing production, however, under the Trump administration, these credits are being phased out.
ICAO's CORSIA’s framework is also pushing airlines worldwide to reduce emissions while forcing governments, including those in Latin America, to evaluate their current biofuel frameworks, legislations and mandates. One key benchmark is the Argus HEFA SAF SPK ARA price published on Argus Open Markets. It's the most liquid SAF assessment globally and is supported by an ICE futures contract, which adds transparency and hedging opportunities.
CF: And beyond pricing benchmarks, what can you tell us about European and UK SAF blend mandates? How are these targets expected to increase until 2030?
JV: Well, in the European Union, the ReFuel EU Aviation Regulation sets a clear trajectory: 2025, 2% SAF blending requirement; 2030, 6% SAF, including a sub-target of 0.7% for synthetic SAF. From there, it accelerates to 20% by 2035, 70% by 2050, but for now, the focus is meeting the 6% target for 2030. In the United Kingdom, SAF mandates are even more ambitious: by 2025, 2% SAF blend mandate; by 2030, 10% SAF blending. The UK also introduces a separate obligation for power-to-liquid fuels starting in 2028, aiming for 3.5% by 2040. These mandates are designed to secure demand and encourage investment in SAF production capacity.
Both regions are signaling strong policy support. This is critical for scaling SAF supply and reducing aviation emissions. And these key market fundamentals are underpinning Argus’ SAF benchmark in Europe.
CF: You talked about Europe and the UK, but what about Asia? How is the region approaching SAF adoption and mandates?
JV: Asia is moving at different speeds depending on the country. Singapore has positioned itself as a key SAF trading hub and is working on voluntary blending programs, while Japan has announced a plan for 10% SAF targets by 2030 for international flights. South Korea is also exploring mandates and incentives, and China is investing heavily in feedstock development and pilot SAF projects, though no formal mandate is yet in place.
Overall, Asia is focusing on building supply chains and infrastructure first, with regulatory frameworks expected to tighten later this decade.
CF: And what about the United States?
JV: The U.S. is one of the most active SAF markets globally, thanks to its strong policy support. The Inflation Reduction Act introduced SAF credits of up to $1.75 per gallon, depending on the lifecycle emissions reductions, which has significantly boosted investment. The Blenders Tax Credit, a state-level program like California's Low Carbon Fuel Standard, or LCFS, has provided additional incentives.
Production capacity is expanding rapidly, with multiple HEFA and alcohol-to-jet (ATJ) projects under development. Airlines have signed long-term offtake agreements, and the U.S. is expected to remain a key driver of global SAF supply growth through 2030.
CF: Now to Lucas, let's talk about Latin America. What's the latest?
Lucas Boacnin: Thank you, Camila. Talking about Latin America, we are moving forward, but progress varies by country. Brazil is the leader in this regard, having signed the Future of Fuel law in October 2024, making it the first in the region to have a SAF mandate.
By the new law, the aviation sector will be required to reduce greenhouse gas emissions (GHGs) by 1% starting in 2027, and by up to 10% by 2037. This is the equivalent to a 1.5% volumetric blend mandate in 2027, growing to 15% volumetric mandate in 2037, assuming a soybean oil-based SAF utilization. It's important to mention that this year, Brazilian market participants completed the first SAF imports for LATAM [Airlines], and Argus is also launching a new import parity price for SAF in Paranaguá, giving the market a clear benchmark.
CF: And Lucas, can you give us some insights on the Argus methodology for SAF?
LB: Argus has launched calculated import parity prices for renewable diesel in Brazil and Chile, and for sustainable aviation fuel (SAF) in Brazil. The calculations show the value of the product delivered to the location from the U.S. Gulf Coast, taking into account the highest value and the most liquid alternative market for the producer. In the case of renewable diesel, this is California, and for SAF, the northwest Europe.
And the U.S. Gulf Coast is used because of its proximity to Latin America and its emergence as a production hub for renewable diesel and SAF.
CF: Lucas, Argus has an import parity price in Brazil, but what is going on in the neighboring countries?
LB: Very good question, Camila. So, in Chile, we have Vuelo Limpio. It's an initiative that is promoting SAF adoption.
In Uruguay, companies are exploring coprocessing and greenfield projects for the production of SAF. It is important to mention that in all Southern Cone, there are financial delays, and this is slowing the project.
And now going on to Mexico and Argentina, both countries are considering SAF mandates tied to compliance to the International Civil Aviation Organization, and both are trying to leverage soybean oil supply chains. And finally, we have Colombia. Colombia is undergoing some SAF discussions as part of a decarbonization strategy for the country.
CF: And how do these developments in Latin America compare to Europe, the U.S., and Asia?
LB: So, it's important to mention that mandatory and voluntary biofuels demands in South America long lagged behind the rest of the world. But it is beginning to take a foothold as countries and companies look to reduce their carbon footprint. And also, countries are having internal discussions.v
They are trying to prioritize their feedstock supplies for internal production and try to position themselves as either biofuels or feedstock supply hubs.
CF: So, Josh, how does Argus support this market?
JV: Argus provides the most trusted SAF benchmarks globally, including SAF 100 prices around the United States, including the U.S. Gulf Coast, Illinois, and the U.S. West Coast, SAF in Singapore, import parity prices for Latin America, as mentioned by Lucas, and the Argus HEFA SAF SPK ARA price, which has an ICE futures contract linked to it, which helps market participants manage their risk. Our goal here at Argus is to help market participants navigate pricing, compliance and investment decisions with transparency.
CF: So, as a recap, global SAF mandates are tightening, Latin America is making progress with Brazil leading the way, and Argus remains the benchmark for SAF pricing worldwide. So, thank you Josh and thank you Lucas. We really appreciate your insights. And thank you to our listeners.
For more details and to download our latest SAF report, visit argusmedia.com. See you next time.
