A draft bill to set a new biofuels law with new blending mandates in Argentina is likely to increase the country’s soyabean oil exports, AgriCensus reported the director of a biodiesel producers’ lobbying group as saying on 17 May.
“This will certainly impact Argentina’s soya oil exports as the volume of soya oil which will not be used for biodiesel production will have to go to the export market. An additional 500,000 tonnes of soya oil will be oriented to the export market if the new regulation is approved,” Victor Castro, director at Argentine biodiesel producers' lobby Carbio, told AgriCensus.
“Argentina has a share of 50% of the global soya oil export market and the increased offer of these 500,000 tonnes will also have an impact on the Argentina soya oil FOB price.”
However, the new biofuels law was unlikely to have an impact on exports of Argentine biodiesel as biofuels produced to fulfil the new blending mandate would be produced by small and medium-sized companies (SMEs) that were not able to export, according to Castro.
Argentina’s current biodiesel law, which was due to expire on 12 May but was extended by a government decree for an additional two-month period, has a mandate of 12% for bioethanol in gasoline and 10% for biodiesel in diesel, AgriCensus wrote.
The decree stipulated that the current biodiesel law would now remain valid until 12 July or “until a new biofuels regulatory framework comes into effect, whichever comes first”, the report said.
Argentina’s ruling coalition Frente de Todos was advocating a draft to reduce the biodiesel mandate to 5%, but the Energy Secretariat would retain the flexibility to increase it or reduce it to as low as 3% depending on market conditions, AgriCensus wrote.
The bioethanol mandate would remain at 12%, with a division of 6% for sugarcane-based ethanol and 6% from corn-based ethanol. The bill also stipulated that the ethanol mandate could also be increased or reduced depending on market conditions.
Valid until the end of 2030, the new biodiesel regulation was being implemented as the country battled domestic inflation and the peso was losing value against other international currencies, AgriCensus said.
Oil companies were not currently meeting the blending mandates stipulated in the biofuels law, Claudio Molina, executive director of Argentina’s Biofuels Association told AgriCensus.