Argentina biofuel bill with 5% diesel blend mandate cut made law

16 Jul 2021 | Liliana Minton

The biofuels bill that cuts the use of biodiesel in Argentina's finished diesel mix by five percentage points to 5% while maintaining the ethanol blend ratio at 12%, was made law by Argentina’s Senate in the early hours of Friday, according to local media reports.

The newly-approved biofuels bill states that the biodiesel mix into diesel fuel will be reduced to 5%, and gives the Energy Secretariat 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 Energy Secretariat is also able to increase or reduce that level depending on market conditions.

However, the sector – which has increased capacity on the back of government support – has voiced concerns, with some facilities cutting production ahead of the law coming into effect.

“Many [soyoil-based biodiesel] SME plants were preparing for the now approved bill, working at less capacity and even some of them closing,” an Argentinean trade source told Agricensus.

The new law has been met by heavy criticism from soyoil-based biodiesel (SME) producers, as the previous legal framework, which was signed into law in 2006, was aimed at promoting investment at SME plants and the development of regional economies.

That move helped Argentina emerge as one of the main crush powerhouses globally.

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.