Latin America's Biofuels Sector Eyes Global Leadership Amid Sustainability Push

Latin America is positioning itself as a potential leader in sustainable biofuels and palm oil production, driven by growing demand for Sustainable Aviation Fuel (SAF) and stricter international regulations. However, challenges remain, including policy inertia in Argentina and the need for financial support for small producers.

Argentina's stalled biofuels revolution

Argentina's biofuels sector remains constrained by the influence of the oil industry. Claudio Molina, a key advocate, notes that the mandatory biodiesel blend is nominally 7.5% but in practice hovers around 6%, and was cut from 10% to 5% in 2021 before being partially restored. He describes a "capture of the regulator" by petroleum refiners, with YPF dominating. Source: clarin This contrasts with official statements suggesting higher blends are only viable when oil prices are high.

Palm oil and SAF: Colombia's opportunity

Colombia's palm oil sector exports 30% of its production, with Bioplantas generating $60,000 million COP annually from exports. Juan Esteban Correa highlights the potential for SAF, which could require 600,000 new tonnes of oil—a 40% increase in cultivation. Source: larepublicaco The RSPO's Joseph D'Cruz confirms that Latin America can expand palm oil production without deforestation, citing Colombia's 99% no-deforestation plantings and Mexico's 14 million hectares of suitable land. Source: infobae However, he warns that small producers struggle with the cost of compliance and need better access to premium markets.

Aviation and climate commitments

Aeroméxico and Bimbo have announced a pioneering partnership to use SAF for corporate travel, aiming to reduce emissions without modifying aircraft. Source: heraldomx Meanwhile, Brazil, as COP30 president, is consulting on a roadmap for phasing out fossil fuels, emphasizing a "just, orderly, and equitable transition" despite fossil fuels still supplying 80% of global energy. Source: infobae

What's next

The success of Latin America's biofuels push hinges on resolving the tension between oil industry interests and regulatory ambition, and on ensuring that sustainability standards are financially viable for all producers. With the EU's Deforestation Regulation (EUDR) tightening market access, the region must balance growth with traceability.