Argentina has the capacity to produce approximately 2.2 million tonnes of biodiesel per annum. According to market estimates, 650 thousand tonnes per year will be required domestically to meet the 2010 objective established by Law 26093 (Regime for the regulation and Promotion of the production and Use of Sustainable biofuels). This objective establishes that 5% of the diesel consumed in Argentina must be biodiesel in 2010. Moreover, the law will make it obligatory to use 2% bioethanol mixes next year.

Molina explained that activity in the sector was very low during the first quarter of the year due to the financial crisis and the considerable surpluses of subsidised US biodiesel dumped onto the European market. Nevertheless, international trade has recovered and in the last quarter, the industry has seen activity pick up to approximately 80-90% of full capacity. As a result, on average, plants have been operating at approximately 60% capacity over the year. Molina highlights that this figure is “very important, if one considers the initial level of inactivity”.

Molina talked about the measures taken to produce and supply biofuel for Argentina’s domestic market, stating that $500 million had been invested, although he recognised that investments in new projects had slowed right down. However, Molina underlined that several projects in the pipeline will be initiated once the global and Argentinean economies and financial markets recover.

The CEO of the Argentinean Biofuel and Hydrogen Association estimated that the domestic market will grow next year and that exports could “reach record average levels, if international conditions remain”.

There are currently three types of biofuel producer in Argentina. Firstly, major oil companies such as Renova (Vicentín and Glencore), Ecofuel (AGD and Bunge), Dreyfus and Molinos Río de la Plata, with a combined installed capacity of 850,000 tonnes per annum.

Next come a number of “large independents” (such as Unitec Bio, Explora, Patagonia Bioenergía and Rosario Bioenergy), which do not have their own raw materials, but have an installed capacity of 570,000 tonnes.

Lastly, there are several “small independents”, which comprise around a dozen plants with 200,000 tonnes of installed capacity and include firms such as Soyenergy, Biomadero, Derivados San Luis, Pitey and Energías Renovables Argentinas. This group has the greatest growth potential in coming years as domestic demand rises.

For additional information:

Argentinean Ministry of Agriculture