Argentina’s new biofuels law could increase soyoil export capacity

The potential approval of a draft bill to set a new biofuels law with new blending mandates is likely to increase the volume of soyoil...

The potential approval of a draft bill to set a new biofuels law with new blending mandates is likely to increase the volume of soyoil available for export from the country, Victor Castro, director at Argentine biodiesel producers’ lobby Carbio, has told Agricensus.

“This will certainly impact Argentina’s soyoil exports as the volume of soyoil which will not be used for biodiesel production will have to go to the export market. An additional 500,000 mt of soyoil will be oriented to the export market if the new regulation is approved,” Castro said.

“Argentina has a share of 50% of the global soyoil export market and the increased offer of these 500,000 mt will also have an impact on the Argentina soyoil FOB price,” the executive said.

However, the new biofuels law is unlikely to have an impact on exports of Argentine biodiesel as biofuels produced to fulfill the new blending mandate is produced by SMEs that are not able to send their production into the export market, Castro said.

Argentina’s current biodiesel law, which is set to expire on May 12 but was extended by a government decree for an additional two-month period, currently has a mandate of 12% for bioethanol in gasoline and 10% for biodiesel in diesel.

The decree stipulates that the current biodiesel law will now remain valid until 12 July or “until a new biofuels regulatory framework comes into effect, whichever comes first.”

The draft bill being advocated by lawmakers from Argentina’s ruling coalition Frente de Todos, stipulates that the biodiesel mandate will be reduced to 5% although the Energy Secretariat would have the flexibility to increase the blending mandate or reduce it to as low as 3% depending on market conditions.

The bioethanol mandate will remain at 12%, with a division of 6% for sugarcane-based ethanol and 6% from corn-based ethanol. The bill stipulates that the ethanol mandate could also be increased or reduced by the Energy Secretariat depending on certain market conditions.

The bill stipulates that the new biodiesel regulation will be valid until the end of 2030, with the measures being implemented as the country battles domestic inflation and the sliding value of the peso against other international currencies.

Claudio Molina, executive director of Argentina’s Biofuels Association told Agricensus that oil companies are not currently meeting the blending mandates stipulated in the biofuels law.

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