Latin America needs sustainable aviation fuel to reduce aviation emissions, but the cost of deploying it could become a connectivity challenge if the premium is passed directly to passengers. An ALTA/ICF study published in March 2026 estimates that SAF remains several times more expensive than conventional jet fuel and models significant demand reductions under scenarios where decarbonisation costs are reflected in fares. The question is therefore shifting from whether SAF is needed to how Latin America and the Caribbean can finance its adoption without pricing passengers out of the market.
SAF turns a climate challenge into a cost challenge
Sustainable aviation fuel is one of the main long-term tools available to reduce aviation emissions, but its economics remain difficult for Latin American and Caribbean airlines. The ALTA/ICF report estimates that SAF is currently between three and twelve times more expensive than conventional jet fuel and expects a significant premium to remain through 2050, even as production technologies mature and volumes increase.
The cost differential matters particularly in Latin America and the Caribbean because fuel already represents a major component of airline expenditure. ALTA/ICF places jet fuel at around 40% of airline operating costs in its discussion of regional decarbonisation support, meaning that higher fuel prices can quickly become a broader affordability issue for carriers and passengers.
Air travel itself remains less mature than in North America. The March 2026 study reports an average of about 0.67 air trips per capita per year in Latin America and the Caribbean, compared with roughly 2.5 in North America. ALTA/ICF therefore places particular emphasis on affordability as the region continues expanding access to air transport.
What happens when the full cost reaches passengers?
ALTA/ICF tests an aggressive 2050 scenario based on a high ICAO Long-Term Aspirational Goal pathway. The model assumes that SAF replaces 96% of fossil aviation fuel, with carbon mechanisms used only for residual emissions. Under those assumptions, the report estimates an additional cost of approximately US$43 per departing seat, equivalent to around US$30.6 billion annually across the regional aviation industry.
Passenger price sensitivity then becomes central to the result. ALTA/ICF estimates that the additional ticket cost under the high-SAF scenario could correspond to an approximately 30% reduction in air traffic and connectivity, with an associated aviation economic loss of around US$156 billion. The report links that potential impact to passengers, airlines, tourism and the wider regional economy.
The 30% figure is a modelling outcome, not a forecast that Latin American air traffic will fall by that amount. The result depends on the scenario assumptions, including a very high SAF share and the price elasticity of air travel used in the study. ALTA/ICF states that the elasticity input was developed through research by the University of San Andrés for the study.
Lower SAF blends still expose the affordability problem
ALTA/ICF also models less aggressive pathways combining SAF with carbon credits. A 20% SAF blend in 2050 produces an estimated annual SAF premium of US$8.3 billion, rising to US$12.9 billion at 30%, US$17.8 billion at 40% and US$22.7 billion at 50%. When carbon-credit costs are added, total annual decarbonisation expenditure increases from US$30.5 billion in the 20% scenario to US$37.3 billion in the 50% scenario.
The corresponding modelled reduction in departing-seat demand ranges from 19.5% with a 20% SAF blend to 24% with a 50% blend. ALTA/ICF explicitly describes the calculation as an extreme case in which the entire cost impact is passed through to passengers. That qualification materially changes how the results should be interpreted.
The scenarios therefore highlight a question that extends beyond the percentage of SAF in the fuel mix. Who absorbs the premium may matter almost as much as how much SAF is deployed.
The price of SAF will not be the same across Latin America
Regional averages also hide major differences between individual aviation markets. ALTA/ICF projects an average SAF price of about US$6.08 per gallon in 2050 under a 20% blend, compared with US$6.47 under a 50% blend and US$6.77 under a 100% blend.
Feedstock availability and economic conditions create additional national differences. Under the report’s 50% SAF scenario, the model estimates that SAF prices in The Bahamas could exceed prices in Brazil by more than 20% in 2050, principally because of feedstock constraints.
The comparison illustrates why a single regional SAF cost assumption can be misleading. Brazil’s agricultural and biofuel base, Caribbean island markets and countries with different energy systems or feedstock availability will not necessarily experience the transition at the same cost.
Who should absorb the SAF premium?
ALTA/ICF argues that rapid deployment of unsubsidised SAF could place significant pressure on passenger prices and regional connectivity. The report therefore identifies policy support as part of the transition rather than treating the SAF premium as a cost that airlines or travellers must automatically absorb alone.
Potential mechanisms identified in the March 2026 report include tax relief for SAF purchases, rebates or discounts on airport and air navigation charges linked to verified SAF use, differentiated fiscal treatment, multilateral financing and revenue-certainty mechanisms. ALTA/ICF also points to foreign investment and climate-finance structures as possible tools for developing production and reducing the cost pressure reaching airlines.
A phased SAF strategy forms another part of the report’s recommendations. ALTA/ICF calls for stronger renewable-fuel supply chains, domestic bankable demand, access to export markets, CORSIA certification, streamlined regulation and tools such as book-and-claim systems to help create scale without placing the full transition cost on passengers.
Protecting connectivity changes the SAF equation
Latin America’s SAF challenge is therefore not limited to fuel production or aircraft emissions. Air transport connects communities across large distances, islands and difficult geographies where alternative transport options can be limited, making affordability part of the region’s broader connectivity equation.
ALTA/ICF does not argue against SAF deployment. The March 2026 report instead presents a trade-off: sustainable aviation fuel is required for long-term emissions reduction, while an unmanaged price premium could constrain demand if it flows directly into fares. Public policy, financing structures and industry coordination will determine how much of that cost ultimately reaches passengers.
Latin America’s SAF transition will ultimately be measured by two outcomes: how much aviation emissions can fall, and whether passengers can still afford to fly.
Why is SAF more expensive than conventional jet fuel?
SAF production remains less mature and more capital-intensive than conventional fuel production, while feedstock, technology and supply-chain costs vary significantly by pathway. ALTA/ICF estimates current SAF prices at three to twelve times those of conventional jet fuel.
How much could SAF add to airline costs in Latin America?
In ALTA/ICF’s high-SAF 2050 scenario, the model estimates an additional cost of around US$43 per departing seat, or US$30.6 billion annually across the industry.
Does ALTA/ICF predict a 30% fall in Latin American air traffic?
No. The approximately 30% figure is a modelling result under a specific 2050 scenario with 96% SAF replacement and assumptions about passenger price sensitivity. It is not a forecast of actual traffic.
How could Latin America reduce the passenger impact of SAF?
ALTA/ICF identifies options including tax relief, airport and navigation-charge incentives, climate finance, revenue-support mechanisms, gradual SAF deployment and stronger regional supply chains.
