Exclusive: Panama to Develop Largest Advanced Biorefinery for Lower-Carbon Aviation Fuel

By Stephanie Kelly

NEW YORK (Reuters) – The government of Panama, in collaboration with energy companies such as SGP BioEnergy, is set to develop a significant advanced biorefinery aimed at boosting the supply of lower-carbon aviation fuel, the companies announced on Wednesday.

This initiative aligns with the airline industry’s commitment to achieve zero net carbon emissions by 2050, amid increasing pressures from governments worldwide for companies to enhance investments in clean energy.

Once completed at the end of 2026, the biorefinery in Panama is expected to produce 180,000 barrels per day, translating to approximately 2.6 billion gallons annually, including sustainable aviation fuel (SAF) and renewable marine diesel.

This project is part of a broader trend, with several companies announcing plans over the past few years to manufacture SAF. The aviation sector is viewed as particularly challenging to decarbonize compared to other forms of transportation, necessitating a significant increase in SAF production to enable the industry to achieve net-zero emissions.

According to an analysis by the International Air Transport Association, production levels will need to surge from an estimated 8 billion liters in 2025 to nearly 450 billion liters by 2050.

SAF generates lower emissions than conventional petroleum-based jet fuel by utilizing various feedstocks such as soybean oil, used cooking oil, and tallow; however, its production costs are higher.

Randy Letang, CEO of SGP BioEnergy, mentioned that the Panama project has already secured a contract for procuring feedstocks, although further details were not disclosed.

The new biorefinery will utilize existing bunker fuel oil terminals located on both the Atlantic and Pacific sides of the country, specifically in Colon and Balboa, respectively. In an interview, Letang commented, "This site is focused on helping the global community principally from an aviation but also from a marine standpoint. Using what already exists and making adjustments to that is the only way that I see we can meet scale and satisfy global demand during this transition in a manner that is acceptable and not disruptive."

The project aims to leverage Panama’s established export infrastructure to provide SAF and renewable marine diesel to global markets, with approximately half of the biorefinery’s capacity dedicated to SAF production.

While Panama does not produce crude oil, it serves as a critical energy transit hub through both the Panama Canal and the Trans-Panama Pipeline.