Mexico’s state oil company Pemex has begun a feasibility study for a proposed sustainable aviation fuel (SAF) biorefinery at the Pajaritos petrochemical complex in Coatzacoalcos, Veracruz, as Latin American countries advance projects to develop domestic supplies of lower-carbon aviation fuels.
The proposed facility would have a capacity of 5,000 barrels per day (b/d) and use sugarcane-based ethanol as feedstock. Pemex officials said the study began in the week preceding the SAF-MX Summit 2026, with findings expected in early 2027, according to local media reports cited by BNamericas.
Sergio Osorio Romero, Pemex’s director of energy transformation, identified Veracruz’s sugarcane production and the site’s relative proximity to Cancún as factors supporting the project. Cancún is one of Mexico’s busiest airports and a major aviation fuel demand centre.
The proposal remains at the feasibility-study stage. Its development will depend on the study’s findings and subsequent investment and project decisions.
Pemex also advances separate SAF project at Tula
Pemex is also planning a smaller SAF facility at its Tula refinery in Hidalgo state, located less than 100 kilometres from Mexico City International Airport.
The Tula project is reported to have a planned annual capacity of approximately 240 million litres, with operations targeted for the second half of 2028. Pemex is also designing a solar photovoltaic plant linked to a proposed green hydrogen project at the refinery, according to information reported from the SAF-MX Summit and cited by Bloomberg.
The Tula and Pajaritos proposals represent separate stages of development. The reported operating target for Tula is a future milestone, while Pajaritos is still undergoing feasibility assessment.
Latin America’s SAF market gains momentum
The projects come as aviation decarbonisation policies and concerns over conventional jet fuel supply are strengthening interest in alternative aviation fuels. The European Union’s ReFuelEU Aviation regulation introduces progressively tighter SAF requirements, creating a potential export market for producers able to supply qualifying fuel at competitive costs.
Feedstock availability and cost are central to project economics. Sugarcane-based ethanol offers a potential route for Mexico to connect an established agricultural sector with aviation fuel production, although the final economics will depend on conversion technology, feedstock pricing, logistics and applicable fuel sustainability requirements.
SAF can be produced through biomass-based pathways or synthetic routes such as power-to-liquids (PtL), which use renewable electricity and hydrogen alongside a carbon source. PtL fuels could expand production beyond the limits imposed by the availability of crop-based feedstocks and waste fats, but their competitiveness depends on factors including renewable electricity and green hydrogen costs.
Argentina advances SAF and renewable fuels projects
Argentina is also developing its SAF pipeline. TotalEnergies’ trading arm has signed a long-term offtake agreement covering SAF and other renewable fuels associated with the planned conversion of the San Lorenzo refinery in Santa Fe province.
Santa Fe Bio, a company formed by state-controlled YPF and Essential Energy, plans to invest approximately US$400 million in the project. The proposed biorefinery is expected to produce around 170,000 tonnes per year of SAF and hydrotreated vegetable oil (HVO), a renewable diesel substitute.
Separately, Germany’s development cooperation agency GIZ, German developer eab New Energy and Uruguay-based SEG Ingeniería have launched a partnership to study an e-methanol project in Córdoba province.
Other SAF-related developments are being tracked in Brazil, Colombia, Panama and Uruguay. Chile is also exploring opportunities in synthetic fuels, including industrial-scale projects in the Magallanes and Biobío regions.
Bioenergy Business Analysis
Pemex’s Pajaritos proposal highlights a key question for Mexico’s emerging SAF industry: whether domestic agricultural feedstocks can support commercially viable aviation fuel production at scale. Veracruz’s sugarcane base provides a potential feedstock advantage, while the location may offer logistical benefits for serving aviation demand in the country’s southeast.
However, a 5,000 b/d design target should not be interpreted as confirmed production capacity or an investment commitment. The feasibility study will need to establish the preferred conversion pathway, capital requirements, feedstock supply arrangements, operating costs and expected fuel yields. The reported figure is expressed in barrels per day, so it should not be directly compared with projects reported in tonnes per year or litres per year without converting units and confirming the underlying assumptions.
