The production and use of SAF is still in its infancy, but the importance of SAF is growing around the world, including Latin America. Are countries in Latin America prepared?
Listen in as Josh Vence, business development manager for Latin America at Argus, and Jaime Escobar, head of fuel and user charges at ALTA, give an overview of the growing SAF market in Latin America and what’s next for the region.
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Josh: My name is Josh Vence, business development manager for Argus in Latin America. And joining me today we have Mr. Jaime Escobar, head of fuel and user charges at ALTA, Latin American and the Caribbean Air Transport Association. In today's talk, we're going to discuss a brief overview of SAF and the commodities development in Latin America. Jaime, thank you for joining us today.
Jaime: Hello, everybody. I'm speaking from Miami. And of course, I'm the head of fuel and user charges at ALTA. We represent 19 airlines operating in the region, and also 15 airlines that operate into the region from the U.S. and Europe.
Josh: Thank you, Jaime. And let's go right quickly into it. Why is SAF important? And why should local airlines and governments in Latin America care about this new and upcoming commodity?
Jaime: Our board of directors, they have issued a special mandate to us working at ALTA to have SAF as a number one priority in our initiatives. We need to move forward with the industry. And of course, airlines and governments in the region need to prepare for the future of aviation and all issues related to SAF.
Josh: SAF production is still at its infancy. And with the major production centers being in the European Union and the United States, and some coming online into Singapore. However, we have started seeing some interest in demand for SAF picking up in our region, as well as around the world. How can countries in our region better position themselves for the development of a local SAF market?
Jaime: Actually, the first country that has already started with the initiative of production is Brazil. However, the actual plant producing SAF will be located across the border in Paraguay. It's Brazilian investors, but the plant will be located actually in Paraguay. It is called the Omega Green Project, and they intend to start producing SAF as early as 2023. We have seen a lot of movement in different countries regarding, first, the legal framework to have companies to be incentivized to produce or to import SAF into the countries. We have the initiative in the Dominican Republic. We have initiatives in Mexico, Costa Rica, of course, being the green country in the region. And only recently, we learned of initiatives that are going forward in Colombia. I will be very happy to be with them so that we know exactly what's going on in each country to tell all our airline members and affiliate members of the association.
Josh: You mentioned that you're working on regulatory framework, particularly for this commodity. What hurdles or barriers to entry, better say, exist across our region right now?
Jaime: I'm sure that the same problem arises in different countries in the world, but it's the multiplicity of government agencies that have to be in the same wavelength and sitting at the same table to take decisions regarding what's going to happen. We have the Ministry of Energy, we have the Ministry of Commerce, we have the Ministry of Mining, we have regulatory bodies, we have the refineries in certain countries that are government-owned, we have the entities that certify the quality of the product. So we have five or six stakeholders in each country that need to get together to have a framework that would work for everybody and the country be ready for importing or producing SAF in the near future.
Josh: Thank you, Jaime. Sounds very complex. Can you give our listeners a brief overview of the work that ALTA is doing across the region to help the development of a local SAF market?
Jaime: Mainly, we have been coordinating for every solution by the Latin American Civil Aviation Commission, that is the LACAC, which is also part of ICAO, to urge countries to set up a legal framework and to incentivize the import and production of SAF in different countries. After this resolution is actually signed in the next meeting at LACAC, we hope that governments will understand the importance and to be one step ahead of what's happening in the rest of the world. And of course, in each country, as I mentioned before, ALTA has a presence and will be hand with hand with the airlines and local authorities in Brazil, Paraguay, Dominican Republic, Mexico, Costa Rica, and Colombia to help them move forward and have everything ready and be prepared for the near future.
Josh: Thank you so much, Jaime, for your time. You can tune into more Argus' podcasts on SAF and other commodities available on our website at www.argusmedia.com/blog. Argus has also developed price assessments for SAF in California, the Netherlands, and Singapore. For more information on our SAF quotes, please feel free to submit an inquiry in the links below. Once again, thank you for tuning in, and we look forward to speaking to you again in our next episode.