Colombia’s palm oil industry is targeting a larger role in the sustainable aviation fuel (SAF) market following a decision by the International Civil Aviation Organization (ICAO) Council to approve a new lifecycle emissions value for SAF produced using Colombian palm oil. Preliminary industry projections indicate the potential for more than US$4.5 billion in investment across the value chain, at least two production plants and over 150,000 direct and indirect jobs.
The announcement was made by the National Federation of Oil Palm Growers (Fedepalma) on 10 November 2026. The organisation said the ICAO decision followed nearly two years of technical and diplomatic work led by the federation, with support from Colombia’s Civil Aviation Authority (Aerocivil).
According to preliminary technical estimates presented by Colombia, SAF produced from domestic palm oil could deliver lifecycle greenhouse gas emissions reductions of up to 55%. The actual reduction would depend on cultivation, production, processing and supply-chain conditions through to the final consumer.
The assessment submitted to ICAO was supported by a World Bank study documenting the characteristics of Colombian palm oil production, including progress towards zero deforestation and the adoption of lower-emission practices.
Colombia Projects US$4.5 Billion SAF Investment Opportunity
Fedepalma’s preliminary scenario envisages the development of at least two SAF production plants in Colombia. Investment across the wider value chain could exceed US$4.5 billion, with the potential to generate more than 150,000 direct and indirect jobs across agriculture and industrial fuel production.
The estimates are not confirmed project investments or employment commitments. Fedepalma said the opportunity would need to progress through feasibility studies, financial structuring and market assessments before the proposed facilities and associated supply chains could be developed.
For Colombia’s palm oil producers, the recognition could create an additional market for domestic output and connect agricultural production with the aviation fuel industry. It also places greater emphasis on demonstrating the environmental performance and traceability of feedstock supplies.
Nicolás Pérez Marulanda, Executive President of Fedepalma, said the recognition would create opportunities to attract investment, expand agro-industrial activity and generate rural employment.
He said: “This is a very important achievement for Colombian palm cultivation and for the country. At Fedepalma, we have led a technical process that has enabled us to present the characteristics and sustainability conditions of our palm oil on international platforms.”
He added that the recognition could help the sector participate in a strategic industry and promote investment, agro-industrial development and rural employment.
Ecopetrol’s Refinery Infrastructure Could Support SAF Production
The ICAO decision also recognises co-processing of renewable feedstocks in petroleum refineries as an option for producing aviation fuel. This could allow Colombia to explore SAF production using existing industrial infrastructure rather than depending entirely on new standalone facilities.
State-controlled energy company Ecopetrol has technology to co-process renewable feedstocks, including palm oil, according to Fedepalma. The capability could provide a route for incorporating renewable raw materials into existing refining operations.
The explanatory memorandum accompanying a Colombian legislative proposal on sustainable aviation fuels also refers to Ecopetrol’s previous production of jet fuel containing renewable components. It records that the company produced 32,000 barrels of such fuel in November 2024, using feedstocks that included used cooking oil and palm oil.
This historical production demonstrates an existing technical capability, but it should not be interpreted as evidence of commercial-scale SAF production or a commitment to a new SAF plant.
Feedstock availability will remain an important consideration. The legislative proposal identifies vegetable oils, used cooking oil and urban waste among the potential renewable inputs for SAF production, subject to applicable eligibility and sustainability requirements.
The proposal also points to Colombia’s agricultural land potential. Its explanatory memorandum cites an agricultural frontier exceeding 42 million hectares, with approximately 20% currently in use. Meta, Vichada, Casanare and Antioquia are identified as departments with areas that could support agricultural activities associated with the emerging value chain.
However, the total agricultural frontier should not be interpreted as land available for palm oil expansion. Any development would need to account for local agricultural suitability, environmental restrictions and the protection of forests and areas of high conservation value.
The legislative initiative envisages sustained domestic SAF production from 2028. Achieving this would require a diversified feedstock supply, technical modifications to refineries and the development of the necessary production and distribution infrastructure.
Proposed Tax Incentives Aim to Attract SAF Investors
Alongside the international recognition, Colombia’s legislative proposal seeks to establish a framework to encourage investment in SAF production and related activities, including feedstock supply, blending, storage and distribution.
The measures described in the supplied proposal include a deduction equivalent to 50% of eligible project investment against income tax, subject to a maximum deduction period of 15 years. Other proposed provisions include customs-duty exemptions for imported machinery and equipment, accelerated depreciation of productive assets at up to 33.33% annually, and VAT exemptions for specified goods and services associated with project development and operation.
The proposal also envisages exempting SAF and its energy by-products from the national carbon tax. Eligibility would be linked to project registration with the Ministry of Mines and Energy.
These measures remain proposals rather than established incentives. Their final scope, duration and eligibility conditions will depend on the legislative process and the enacted text, if approved.
The explanatory memorandum also identifies production costs as a significant barrier to market development. It estimates that a gallon of SAF currently costs three to four times as much to produce as conventional aviation fuel.
The cost premium could affect the commercial viability of future projects, particularly where producers must secure reliable feedstock supplies and finance new processing infrastructure. Proposed tax and customs measures are intended to improve investment conditions, but they would not by themselves resolve feedstock, technology, financing or market-price challenges.
Colombia’s Aviation Fuel Demand Could Reach 3.7 Billion Litres by 2050
The legislative proposal cites a potential increase in Colombia’s aviation fuel demand to 3.7 billion litres annually by 2050. The projection provides an indication of the possible domestic market for aviation fuels, although it does not establish how much of that demand could be supplied by SAF or by domestically produced fuel.
For the palm oil industry, ICAO’s decision creates a potential route into the aviation fuel supply chain. The scale of the opportunity will depend on whether preliminary investment scenarios can be translated into bankable projects, sustainable feedstock supplies and commercially competitive production.
Colombia’s next challenge is therefore to move from international feedstock recognition towards the regulatory, technical and financial conditions required for a domestic SAF industry.
