Resumen del podcast
Industrial Info Resources presenta un nuevo podcast que analiza las principales tendencias de inversión sostenible en América Latina. A casi diez años del Acuerdo de París, las economías más relevantes de la región buscan equilibrar la transición hacia fuentes de energía más limpias sin comprometer la confiabilidad del suministro energético.
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Idioma del video
[Intro] (00:00):
Almost ten years after the Paris Agreement, and with many Latin American countries having made climate commitments for 2035 and 2050, the pressure for decarbonization, which shapes the pace of investments worldwide, has also become a dominant trend in Latin America. However, due to the current global geopolitical context, inflationary pressures and the ongoing need to strengthen energy security, just days before the start of COP30, it is expected that many of the commitments already set as targets for 2035 will need to be adjusted. This creates uncertainty regarding the timelines and investment projections for decarbonization projects in the region. Currently, we are recording investments totaling $968 billion across the entire region linked to this trend. What are the effects? Which industrial sectors and countries have the highest projected spending? Is it possible that the current global context could lead to a slowdown in renewable investments or the ESG agenda?
Leandro Londero (01:23):
My name is Leandro, and I lead the research area for the oil and natural gas industrial sector for Latin America at Industrial Info Resources, a company recognized for more than 40 years of experience offering reliable, verified and constantly updated industrial data across 12 industrial sectors worldwide. Today, to analyze the main decarbonization trends in the region and review investment projections, I am joined by Chester Conway, Assistant VP manager for the alternative fuel sector in Latin America. How are you, Chester?
Chester Conway (02:01):
Good, thank you, Leandro. How are you?
To provide some context — the total spending monitored by the Industrial Info Resources tool for active capital projects in Latin America amounts to $2.15 trillion. And as you mentioned, the total sum of active investments linked to ESG initiatives is nearly $1 trillion, representing 46% of the total. This makes it a predominant trend in the region at this moment.
And regarding your initial question, the largest concentration of investments is focused on the electric sector, specifically for renewable energy generation, where investments amount to $850 billion. And this makes sense, since currently the investment market for new generation capacity in Latin America is practically all renewable. Of all the active projects registered for the construction of new plants or the addition of units, 95% correspond to renewable generation, with a strong dominance of solar projects, followed by wind farm initiatives and also hydroelectric plants.
Leandro Londero (02:58):
Chester, could we say that this is directly linked to what we mentioned at the beginning, since in the context of the Paris Agreement, most countries in the region, or at least the main powers, set targets for the share of renewables in their electricity generation mix that are usually around 30% or higher?
Chester Conway (03:18):
And that 30%, along with the investments you mentioned at the start of your analysis, are directly tied to the market for centralized generation. Now, if we also take into account the portion of investments that falls within the pace of investments related to distributed generation, we have to consider that one of the main drivers for this market, or key motivators, is the use of photovoltaic panels as a tool for decarbonizing industrial processes, especially in the main industrial plants of the region. Operators see this as a starting point for decarbonization linked to the electrification of their plant systems. And while there are many investments related to what I mentioned, the photovoltaic panels, which is strongly tied to the drop in technology prices, is making access to the technology easier and more affordable across Latin America.
Leandro Londero (04:22):
Thank you.
Chester Conway (04:22):
Within the renewable generation sector, for years, due to the use of biomass as the main fuel, especially in industries that have easy access to sugarcane waste — such as the food industry or the sugar-alcohol sector — which is very relevant for different countries in the region, but especially for Brazil, which is a leader when it comes to projections. This is linked, as I mentioned, to the distributed generation market. But if we look at the spot generation market, or again, the centralized generation market, in the long term, the main drivers are tied to the development of technologies such as green hydrogen projects and the high demand for the construction of new data centers.
Regarding data centers, what we are currently seeing as a global trend is that investors and companies are choosing countries with greater access to renewable energy sources, in order to reduce dependence on thermoelectric power plants. In the case of green hydrogen, there are two scenarios, of course — green hydrogen has always supported renewable energy, but two scenarios are observed: one is direct demand from the spot market, and the other involves projects that already have dedicated photovoltaic or wind farms for energy supply.
Leandro Londero (05:42):
Regarding the green hydrogen market — let's briefly delve into the investment trends for the chemical processing sector. What are the investment prospects for our region, and which countries are currently leading this trend?
Chester Conway (05:55):
Well, that's a very interesting question, honestly. And although it's a sector that began to grow only a few years ago, a total of 112 green hydrogen projects have been registered, and 14 countries in the region have announced investments for the construction of new plants, with Brazil and Chile leading the trend. These projects represent nearly $60 billion, if we take into account green byproducts such as ammonia, methanol, alternative fuels or fertilizers. And although — there are also registered projects under construction in Trinidad and Tobago, Brazil and Peru.
The development of the sector in the region faces several significant challenges, including global uncertainty about product demand, bureaucratic delays in obtaining environmental and sector-specific permits, and the limited availability of resources and equipment needed to execute projects on time and as planned. In a positive scenario, the real investment boom would be seen at the beginning of the next decade, marking an accelerated pace of growth until around 2050.
Leandro Londero (07:13):
This pace of investment you mentioned, especially with the projection toward 2050, and the bottlenecks observed in advancing the investment strategy in the green hydrogen sector, is also closely tied to the current limitations related to infrastructure — energy transmission in the region — which is one of the main problems when it comes to discussing the growth of renewable energies for the world's leading economies.
Chester Conway (07:36):
And here I want to emphasize and highlight this issue, because the problem we're seeing with transmission networks is not unique to Latin America, nor is it foreign to other mature markets like the United States or Europe. Of course, the solution or alternative currently being considered to provide greater security for renewable energy projects, and greater reliability in renewable energy supply, is battery projects, energy storage, or BESS projects, as they are known. Currently, for the Latin American region, we are seeing investments of around $40 billion, if I'm not mistaken, with Chile leading this investment segment.
Let's remember Chile, as part of its climate commitment agenda, has set the goal of shutting down all its thermoelectric power plants, especially those that currently use coal as fuel, by 2030, supported by renewable generation through wind farms or photovoltaic parks, with the support of energy storage projects.
Leandro Londero (08:39):
Specifically regarding energy storage projects, another reality we are seeing is that — gaining momentum or strength within the Latin American market — is the mining sector, due to the importance or need for nickel, copper, and especially lithium, mainly for the manufacturing of the very batteries we mentioned, electric vehicles, which we will analyze this trend shortly, wind turbines, transmission networks and so on. And Latin America is very well positioned in this context, especially considering that Chile, Bolivia and Argentina together hold 60% of the world's lithium reserves. And within our database, we already record 90 investment projects for lithium processing and extraction.
At the same time, Chile and Brazil are looking to position themselves in the future, not too far off, within the rare earth extraction sector. And the combination of these potential emerging sectors — both lithium and rare earths — could position Latin America as a key player in the global supply of all the essential materials needed for electromobility, right, for the construction of new electric vehicle engines.
Regarding electric vehicles, I would like to take this opportunity to remind everyone that, as part of the global climate commitments, it is expected that Europe will ban the sale of traditional cars — that is, those with internal combustion engines — by 2035. The only country in our region that has joined this trend so far is Chile. However, investments related to electromobility are being recorded throughout Latin America. The total amount of investments in the Industrial Info Resources database currently amounts to $11 billion.
Chester, regarding this trend or investment factor — could you tell us first which countries are leading the trend in terms of investments, projections for the construction of new electric vehicle manufacturing plants, and on the other hand, where this growing supply is headed within Latin America?
Chester Conway (11:05):
So currently, electromobility projects are mainly concentrated in Brazil and Mexico. In Mexico, the infrastructure for electric vehicles has a strategic purpose of mass export to the United States and Canada. The main objective is not domestic consumption, but rather integration into the North American supply chain, driven by the USMCA, which guarantees tariff-free access.
And in contrast, Brazil's electromobility strategy is aimed at supplying its domestic market, with secondary exports to Mercosur. Its large domestic scale guides investments under a scheme of import substitution and adaptation to local demand. The key factor is its high tariff structure, which will reach 35% in 2026, making domestic production more profitable than imports. Investments are focused on modernizing existing plants of traditional manufacturers seeking to convert combustion engine production lines to electric, as in the cases of Volkswagen and GWM.
Leandro Londero (11:58):
Thank you.
Chester Conway (11:59):
And we also see expansion projects like BYD's project in Camaçari, which is expected to begin operations in 2027, with an investment exceeding $350 million. The project is one of the most significant investments currently for the market in terms of electromobility.
Leandro Londero (12:16):
Right, that's right.
Chester Conway (12:18):
Exactly.
Leandro Londero (12:19):
Thank you. This investment projection regarding electromobility — going back to those $11 billion that are projected to be invested — it sounds low if we compare it to the projected investment for the biofuels and alternative fuels sector, where the total projected spending amounts to almost $50 billion. This makes sense to recap, since only Chile is currently focused on ending the sale of new internal combustion vehicles, and also considering that, according to the most up-to-date data we were able to access or consult, by the end of 2024, only 0.2% of the total vehicle fleet in Latin America was powered by electromobility.
In this regard, there is a clear trend among the main economies in the region to use biofuels as a transitional source toward cleaner or more renewable economies. And within these $50 billion of investment I mentioned, projected by the alternative fuels sector, it is Brazil that leads this trend, and leads it by a wide margin. So my question or inquiry for you, Chester, on this occasion, is related to why Brazil is so well positioned in this trend, and what the future investment prospects are within the sector.
Chester Conway (13:47):
Well, Leandro, it's true that Brazil stands out at this moment and remains the regional leader and a global benchmark, thanks to its well-established biofuels program, historically based on sugarcane ethanol. And in recent years, corn ethanol has been strongly incorporated, diversifying the supply and strengthening national energy security. The recent Future Fuels Law consolidates this leadership by setting emission reduction targets, expanding the use of low-carbon fuels, and certifying the environmental footprint of the entire production chain.
And I think it's important to highlight that the country is also making progress in the development of biomethane, making use of agricultural and industrial waste, not only in traditional alternative fuel plants, but also in facilities in the food and beverage sector, and through municipal and agro-industrial initiatives that aim to convert urban solid waste into biomethane.
Leandro Londero (14:30):
Thank you.
Chester Conway (14:30):
Biomethane from waste in landfills represents a circular economy opportunity, generating fertilizers and carbon dioxide in addition to energy. And this product requires investment in gas networks, and, of course, a regulatory framework that facilitates its certification. These are requirements that currently limit the sector's progress in other countries in the region.
Leandro Londero (14:54):
Although, as you mentioned, gas networks can currently be a limiting factor for investment projections in biomethane, I would just like to point out that there are already projects in Brazil for the construction of new networks dedicated to the use of biogas. Therefore, we can anticipate or project for the future that investments in biomethane generation will continue to grow, as the main transport companies and the country's regulations manage to adapt the transmission system to accommodate these new energy sources that are located in the interior of the country.
Speaking of biomethane — another non-traditional or alternative fuel that I see is gaining traction in the oil sector is SAF, the production of sustainable aviation fuel, where we are already seeing projects related to this trend.
Chester Conway (15:48):
Well, of course — in Brazil we have Petrobras, with already projected investments for the REFAP and RPC refineries. But we also have projected investment initiatives for Colombia, led by Ecopetrol for the Barrancabermeja refinery, ANCAP in Uruguay. And even — while YPF is already adapting to this transition process, they even shut down a refinery that was already closed, the San Lorenzo refinery, which is planned to be converted exclusively for the production of biofuels — the Santa Fe Bio project, which is currently already underway, or in the initial stages of negotiations.
Leandro Londero (16:34):
Regarding SAF, since you have much more experience and knowledge about the sector, I'd like to ask you — on one hand, what is the investment outlook, and on the other hand, what is this investment based on, in terms of demand? Because at present, I don't see that much demand for this new fuel in Latin America.
Chester Conway (16:51):
That's a very good question, Leandro, because in reality, the demand for SAF in Latin America is still limited, but it is growing, driven by international decarbonization commitments and market pressure. Although local airlines are still operating with marginal volumes of SAF, and there are no mandatory blending requirements, interest is growing from companies like GOL and LATAM, as well as from refineries and airports seeking sustainable certifications.
On the other hand, high production costs and the lack of tax incentives remain the main obstacles. Nevertheless, the region's potential, thanks to its abundance of agricultural waste and used oils, positions it as a future strategic supplier of SAF, with demand that could multiply several times by 2030, as supportive policies and technological improvements are implemented. If we speak in concrete investment terms, there are 52 projects registered, totaling an investment of $20.5 billion.
Leandro Londero (17:55):
Thank you for your contribution and for the analysis. Before we wrap up the podcast, as we're already nearing the end of this episode, I wanted to take the opportunity to ask you about another type of fuel, or a market that is even more nascent than SAF — what is the synthetic fuel sector, or e-fuels, as they are also called? My question regarding this particular industrial sector is, on the one hand, to find out what the investment outlook is — if you have any up-to-date figures on this to share with our audience — and what is the real investment projection for the fuel sector?
Chester Conway (18:35):
Knowing that this sector heavily depends on carbon capture and storage projects, but in Latin America, investments in this sector for carbon capture and storage are still not very clear. There is no clear idea yet of what the possible supply of carbon dioxide would be, and the only projects that have so far been approved or are in the evaluation stage are pilot initiatives with a very limited supply capacity.
Leandro Londero (19:00):
Exactly. It may not be so surprising that the situation for the production of fuels like methanol, or green methanol, mainly intended for the maritime sector, is similar to what we discussed about SAF.
Chester Conway (19:05):
Global companies such as HDF and Fico Verde have announced projects in Chile, Uruguay and Brazil, combining green hydrogen with recycled carbon dioxide. And the main obstacles are the high investment costs and a limited industrial scale, which depends on large-scale renewable electricity supply chains and stable policies.
So, to address your question and summarize what we've discussed about alternative fuels, it's important to highlight that the ESG agenda simultaneously drives already-established technologies — such as biogas, biomethane, renewable diesel and advanced ethanol — which provide immediate emission reductions, along with others still under development, such as SAF and e-fuels, which have high potential but come with higher costs and depend on policies and infrastructure.
Leandro Londero (20:04):
Excellent. Well, to conclude — first of all, I want to thank you, Chester, for all the knowledge you've shared with us today on this episode. And I would also like to highlight some key points that will be useful for us to wrap up this episode and conclude the analysis on ESG investments in the region.
We know, or we can observe, regarding the investments being made today, that Latin America is positioning itself and moving into the energy transition sector — not simply driven by decarbonization or emissions reduction goals, but rather viewing it as a real capability, or a genuine opportunity, to attract new investments, create new jobs, and launch new projects to further expand industrial investments in the region. Additionally, it gains strength when it comes to positioning itself, or in terms of managing to position itself correctly on a global level within today's supply value chains. I would mainly like to highlight those two points: that Latin America is moving toward the energy transition, and is incorporating it into its investment structure as a growth opportunity for the region.
Chester Conway (21:04):
Exactly. And another key point to keep in mind is that the transition in the region will not be linear. The current global context is pushing several governments to reevaluate deadlines and targets for 2035. But this does not mean a step backward — rather, it represents a new balance between pragmatism and ambition. The region seems to be opting for a gradual transition, anchored in its natural advantages.
Leandro Londero (21:40):
Well, we thank all of you who took the time to join us. I hope we've helped everyone gain a better understanding of some of the ongoing currents of change in the region, and if you have any questions, we invite you to contact us at the email address and phone number shown on the screen. Thank you very much.
Almost ten years after the Paris Agreement, and with many Latin American countries having made climate commitments for 2035 and 2050, the pressure for decarbonization, which shapes the pace of investments worldwide, has also become a dominant trend in Latin America. However, due to the current global geopolitical context, inflationary pressures and the ongoing need to strengthen energy security, just days before the start of COP30, it is expected that many of the commitments already set as targets for 2035 will need to be adjusted. This creates uncertainty regarding the timelines and investment projections for decarbonization projects in the region. Currently, we are recording investments totaling $968 billion across the entire region linked to this trend. What are the effects? Which industrial sectors and countries have the highest projected spending? Is it possible that the current global context could lead to a slowdown in renewable investments or the ESG agenda?
Leandro Londero (01:23):
My name is Leandro, and I lead the research area for the oil and natural gas industrial sector for Latin America at Industrial Info Resources, a company recognized for more than 40 years of experience offering reliable, verified and constantly updated industrial data across 12 industrial sectors worldwide. Today, to analyze the main decarbonization trends in the region and review investment projections, I am joined by Chester Conway, Assistant VP manager for the alternative fuel sector in Latin America. How are you, Chester?
Chester Conway (02:01):
Good, thank you, Leandro. How are you?
To provide some context — the total spending monitored by the Industrial Info Resources tool for active capital projects in Latin America amounts to $2.15 trillion. And as you mentioned, the total sum of active investments linked to ESG initiatives is nearly $1 trillion, representing 46% of the total. This makes it a predominant trend in the region at this moment.
And regarding your initial question, the largest concentration of investments is focused on the electric sector, specifically for renewable energy generation, where investments amount to $850 billion. And this makes sense, since currently the investment market for new generation capacity in Latin America is practically all renewable. Of all the active projects registered for the construction of new plants or the addition of units, 95% correspond to renewable generation, with a strong dominance of solar projects, followed by wind farm initiatives and also hydroelectric plants.
Leandro Londero (02:58):
Chester, could we say that this is directly linked to what we mentioned at the beginning, since in the context of the Paris Agreement, most countries in the region, or at least the main powers, set targets for the share of renewables in their electricity generation mix that are usually around 30% or higher?
Chester Conway (03:18):
And that 30%, along with the investments you mentioned at the start of your analysis, are directly tied to the market for centralized generation. Now, if we also take into account the portion of investments that falls within the pace of investments related to distributed generation, we have to consider that one of the main drivers for this market, or key motivators, is the use of photovoltaic panels as a tool for decarbonizing industrial processes, especially in the main industrial plants of the region. Operators see this as a starting point for decarbonization linked to the electrification of their plant systems. And while there are many investments related to what I mentioned, the photovoltaic panels, which is strongly tied to the drop in technology prices, is making access to the technology easier and more affordable across Latin America.
Leandro Londero (04:22):
Thank you.
Chester Conway (04:22):
Within the renewable generation sector, for years, due to the use of biomass as the main fuel, especially in industries that have easy access to sugarcane waste — such as the food industry or the sugar-alcohol sector — which is very relevant for different countries in the region, but especially for Brazil, which is a leader when it comes to projections. This is linked, as I mentioned, to the distributed generation market. But if we look at the spot generation market, or again, the centralized generation market, in the long term, the main drivers are tied to the development of technologies such as green hydrogen projects and the high demand for the construction of new data centers.
Regarding data centers, what we are currently seeing as a global trend is that investors and companies are choosing countries with greater access to renewable energy sources, in order to reduce dependence on thermoelectric power plants. In the case of green hydrogen, there are two scenarios, of course — green hydrogen has always supported renewable energy, but two scenarios are observed: one is direct demand from the spot market, and the other involves projects that already have dedicated photovoltaic or wind farms for energy supply.
Leandro Londero (05:42):
Regarding the green hydrogen market — let's briefly delve into the investment trends for the chemical processing sector. What are the investment prospects for our region, and which countries are currently leading this trend?
Chester Conway (05:55):
Well, that's a very interesting question, honestly. And although it's a sector that began to grow only a few years ago, a total of 112 green hydrogen projects have been registered, and 14 countries in the region have announced investments for the construction of new plants, with Brazil and Chile leading the trend. These projects represent nearly $60 billion, if we take into account green byproducts such as ammonia, methanol, alternative fuels or fertilizers. And although — there are also registered projects under construction in Trinidad and Tobago, Brazil and Peru.
The development of the sector in the region faces several significant challenges, including global uncertainty about product demand, bureaucratic delays in obtaining environmental and sector-specific permits, and the limited availability of resources and equipment needed to execute projects on time and as planned. In a positive scenario, the real investment boom would be seen at the beginning of the next decade, marking an accelerated pace of growth until around 2050.
Leandro Londero (07:13):
This pace of investment you mentioned, especially with the projection toward 2050, and the bottlenecks observed in advancing the investment strategy in the green hydrogen sector, is also closely tied to the current limitations related to infrastructure — energy transmission in the region — which is one of the main problems when it comes to discussing the growth of renewable energies for the world's leading economies.
Chester Conway (07:36):
And here I want to emphasize and highlight this issue, because the problem we're seeing with transmission networks is not unique to Latin America, nor is it foreign to other mature markets like the United States or Europe. Of course, the solution or alternative currently being considered to provide greater security for renewable energy projects, and greater reliability in renewable energy supply, is battery projects, energy storage, or BESS projects, as they are known. Currently, for the Latin American region, we are seeing investments of around $40 billion, if I'm not mistaken, with Chile leading this investment segment.
Let's remember Chile, as part of its climate commitment agenda, has set the goal of shutting down all its thermoelectric power plants, especially those that currently use coal as fuel, by 2030, supported by renewable generation through wind farms or photovoltaic parks, with the support of energy storage projects.
Leandro Londero (08:39):
Specifically regarding energy storage projects, another reality we are seeing is that — gaining momentum or strength within the Latin American market — is the mining sector, due to the importance or need for nickel, copper, and especially lithium, mainly for the manufacturing of the very batteries we mentioned, electric vehicles, which we will analyze this trend shortly, wind turbines, transmission networks and so on. And Latin America is very well positioned in this context, especially considering that Chile, Bolivia and Argentina together hold 60% of the world's lithium reserves. And within our database, we already record 90 investment projects for lithium processing and extraction.
At the same time, Chile and Brazil are looking to position themselves in the future, not too far off, within the rare earth extraction sector. And the combination of these potential emerging sectors — both lithium and rare earths — could position Latin America as a key player in the global supply of all the essential materials needed for electromobility, right, for the construction of new electric vehicle engines.
Regarding electric vehicles, I would like to take this opportunity to remind everyone that, as part of the global climate commitments, it is expected that Europe will ban the sale of traditional cars — that is, those with internal combustion engines — by 2035. The only country in our region that has joined this trend so far is Chile. However, investments related to electromobility are being recorded throughout Latin America. The total amount of investments in the Industrial Info Resources database currently amounts to $11 billion.
Chester, regarding this trend or investment factor — could you tell us first which countries are leading the trend in terms of investments, projections for the construction of new electric vehicle manufacturing plants, and on the other hand, where this growing supply is headed within Latin America?
Chester Conway (11:05):
So currently, electromobility projects are mainly concentrated in Brazil and Mexico. In Mexico, the infrastructure for electric vehicles has a strategic purpose of mass export to the United States and Canada. The main objective is not domestic consumption, but rather integration into the North American supply chain, driven by the USMCA, which guarantees tariff-free access.
And in contrast, Brazil's electromobility strategy is aimed at supplying its domestic market, with secondary exports to Mercosur. Its large domestic scale guides investments under a scheme of import substitution and adaptation to local demand. The key factor is its high tariff structure, which will reach 35% in 2026, making domestic production more profitable than imports. Investments are focused on modernizing existing plants of traditional manufacturers seeking to convert combustion engine production lines to electric, as in the cases of Volkswagen and GWM.
Leandro Londero (11:58):
Thank you.
Chester Conway (11:59):
And we also see expansion projects like BYD's project in Camaçari, which is expected to begin operations in 2027, with an investment exceeding $350 million. The project is one of the most significant investments currently for the market in terms of electromobility.
Leandro Londero (12:16):
Right, that's right.
Chester Conway (12:18):
Exactly.
Leandro Londero (12:19):
Thank you. This investment projection regarding electromobility — going back to those $11 billion that are projected to be invested — it sounds low if we compare it to the projected investment for the biofuels and alternative fuels sector, where the total projected spending amounts to almost $50 billion. This makes sense to recap, since only Chile is currently focused on ending the sale of new internal combustion vehicles, and also considering that, according to the most up-to-date data we were able to access or consult, by the end of 2024, only 0.2% of the total vehicle fleet in Latin America was powered by electromobility.
In this regard, there is a clear trend among the main economies in the region to use biofuels as a transitional source toward cleaner or more renewable economies. And within these $50 billion of investment I mentioned, projected by the alternative fuels sector, it is Brazil that leads this trend, and leads it by a wide margin. So my question or inquiry for you, Chester, on this occasion, is related to why Brazil is so well positioned in this trend, and what the future investment prospects are within the sector.
Chester Conway (13:47):
Well, Leandro, it's true that Brazil stands out at this moment and remains the regional leader and a global benchmark, thanks to its well-established biofuels program, historically based on sugarcane ethanol. And in recent years, corn ethanol has been strongly incorporated, diversifying the supply and strengthening national energy security. The recent Future Fuels Law consolidates this leadership by setting emission reduction targets, expanding the use of low-carbon fuels, and certifying the environmental footprint of the entire production chain.
And I think it's important to highlight that the country is also making progress in the development of biomethane, making use of agricultural and industrial waste, not only in traditional alternative fuel plants, but also in facilities in the food and beverage sector, and through municipal and agro-industrial initiatives that aim to convert urban solid waste into biomethane.
Leandro Londero (14:30):
Thank you.
Chester Conway (14:30):
Biomethane from waste in landfills represents a circular economy opportunity, generating fertilizers and carbon dioxide in addition to energy. And this product requires investment in gas networks, and, of course, a regulatory framework that facilitates its certification. These are requirements that currently limit the sector's progress in other countries in the region.
Leandro Londero (14:54):
Although, as you mentioned, gas networks can currently be a limiting factor for investment projections in biomethane, I would just like to point out that there are already projects in Brazil for the construction of new networks dedicated to the use of biogas. Therefore, we can anticipate or project for the future that investments in biomethane generation will continue to grow, as the main transport companies and the country's regulations manage to adapt the transmission system to accommodate these new energy sources that are located in the interior of the country.
Speaking of biomethane — another non-traditional or alternative fuel that I see is gaining traction in the oil sector is SAF, the production of sustainable aviation fuel, where we are already seeing projects related to this trend.
Chester Conway (15:48):
Well, of course — in Brazil we have Petrobras, with already projected investments for the REFAP and RPC refineries. But we also have projected investment initiatives for Colombia, led by Ecopetrol for the Barrancabermeja refinery, ANCAP in Uruguay. And even — while YPF is already adapting to this transition process, they even shut down a refinery that was already closed, the San Lorenzo refinery, which is planned to be converted exclusively for the production of biofuels — the Santa Fe Bio project, which is currently already underway, or in the initial stages of negotiations.
Leandro Londero (16:34):
Regarding SAF, since you have much more experience and knowledge about the sector, I'd like to ask you — on one hand, what is the investment outlook, and on the other hand, what is this investment based on, in terms of demand? Because at present, I don't see that much demand for this new fuel in Latin America.
Chester Conway (16:51):
That's a very good question, Leandro, because in reality, the demand for SAF in Latin America is still limited, but it is growing, driven by international decarbonization commitments and market pressure. Although local airlines are still operating with marginal volumes of SAF, and there are no mandatory blending requirements, interest is growing from companies like GOL and LATAM, as well as from refineries and airports seeking sustainable certifications.
On the other hand, high production costs and the lack of tax incentives remain the main obstacles. Nevertheless, the region's potential, thanks to its abundance of agricultural waste and used oils, positions it as a future strategic supplier of SAF, with demand that could multiply several times by 2030, as supportive policies and technological improvements are implemented. If we speak in concrete investment terms, there are 52 projects registered, totaling an investment of $20.5 billion.
Leandro Londero (17:55):
Thank you for your contribution and for the analysis. Before we wrap up the podcast, as we're already nearing the end of this episode, I wanted to take the opportunity to ask you about another type of fuel, or a market that is even more nascent than SAF — what is the synthetic fuel sector, or e-fuels, as they are also called? My question regarding this particular industrial sector is, on the one hand, to find out what the investment outlook is — if you have any up-to-date figures on this to share with our audience — and what is the real investment projection for the fuel sector?
Chester Conway (18:35):
Knowing that this sector heavily depends on carbon capture and storage projects, but in Latin America, investments in this sector for carbon capture and storage are still not very clear. There is no clear idea yet of what the possible supply of carbon dioxide would be, and the only projects that have so far been approved or are in the evaluation stage are pilot initiatives with a very limited supply capacity.
Leandro Londero (19:00):
Exactly. It may not be so surprising that the situation for the production of fuels like methanol, or green methanol, mainly intended for the maritime sector, is similar to what we discussed about SAF.
Chester Conway (19:05):
Global companies such as HDF and Fico Verde have announced projects in Chile, Uruguay and Brazil, combining green hydrogen with recycled carbon dioxide. And the main obstacles are the high investment costs and a limited industrial scale, which depends on large-scale renewable electricity supply chains and stable policies.
So, to address your question and summarize what we've discussed about alternative fuels, it's important to highlight that the ESG agenda simultaneously drives already-established technologies — such as biogas, biomethane, renewable diesel and advanced ethanol — which provide immediate emission reductions, along with others still under development, such as SAF and e-fuels, which have high potential but come with higher costs and depend on policies and infrastructure.
Leandro Londero (20:04):
Excellent. Well, to conclude — first of all, I want to thank you, Chester, for all the knowledge you've shared with us today on this episode. And I would also like to highlight some key points that will be useful for us to wrap up this episode and conclude the analysis on ESG investments in the region.
We know, or we can observe, regarding the investments being made today, that Latin America is positioning itself and moving into the energy transition sector — not simply driven by decarbonization or emissions reduction goals, but rather viewing it as a real capability, or a genuine opportunity, to attract new investments, create new jobs, and launch new projects to further expand industrial investments in the region. Additionally, it gains strength when it comes to positioning itself, or in terms of managing to position itself correctly on a global level within today's supply value chains. I would mainly like to highlight those two points: that Latin America is moving toward the energy transition, and is incorporating it into its investment structure as a growth opportunity for the region.
Chester Conway (21:04):
Exactly. And another key point to keep in mind is that the transition in the region will not be linear. The current global context is pushing several governments to reevaluate deadlines and targets for 2035. But this does not mean a step backward — rather, it represents a new balance between pragmatism and ambition. The region seems to be opting for a gradual transition, anchored in its natural advantages.
Leandro Londero (21:40):
Well, we thank all of you who took the time to join us. I hope we've helped everyone gain a better understanding of some of the ongoing currents of change in the region, and if you have any questions, we invite you to contact us at the email address and phone number shown on the screen. Thank you very much.
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