Energy companies in Panama, along with the government of Panama, announced in a statement on Wednesday, plans to develop an advanced major biorefinery in a bid to increase the supply of lower-carbon aviation fuel.
Governments worldwide are pressuring companies to increase clean energy investment, and the move comes amid the airline industry seeking to achieve zero net carbon emissions by 2050.
The proposed biorefinery in Panama is slated to produce 180,000 barrels per day, equal to 2.6 billion gallons per year, of biofuels, which include sustainable aviation fuel (SAF), and renewable marine diesel. The project is expected to be complete at the end of 2026.
The announcement of the project comes amid a series of announcements from other companies that have joined the effort to produce SAF. A large-scale ramp up in the production of SAF will be required, since the aviation industry is considered harder to decarbonize than other forms of transportation. The ramp up will be essential in order to ensure that the aviation industry reaches net zero carbon emissions.
According to a study by the International Air Transport Association, production of SAF will need to rise from an estimated 8 billion liters in 2025, to almost 450 billion litres in 2050.
Panama secures feedstock procurement contract for SAF
SAF, although more expensive to produce, produces less emissions than traditional petroleum-based jet fuel by utilizing a combination of feedstock including used cooking oil, soybean oil and tallow.
Randy Letang, Chief Executive of SGP BioEnergy, said that the Panama project has already signed a contract to procure feedstock, although details were not revealed.
The new biorefinery will repurpose existing bunker fuel oil terminals on both the Atlantic and Pacific sides of the country in Colon and Balboa, respectively, Letang said.
Letang also said that the new biorefinery will be focused on helping the global community mainly from an aviation, but also from a marine standpoint.
He added that utilizing existing infrastructure and making adjustments where required was the only way that the company could meet global scale and demand in an acceptable and non-disruptive manner.
The project aims to use Panama’s existing export infrastructure to supply SAF and renewable marine diesel globally. Almost half the capacity of the biorefinery will be used to produce SAF.
Panama is not a producer of crude or natural gas, but serves as an energy transit point through both the Panama Canal and the Trans-Panama Pipeline.