Argentina biofuels need long-term policy to spur investment – trade exec

29 March 2011 18:12  [Source: ICIS news]

BUENOS AIRES (ICIS)--The main challenge to develop the Argentine biofuels industry is to become attractive for foreign investors through long-term policies, an industry source said on Tuesday at the Clean Energy Congress Argentina 2011 conference.

“Only through measures that allow the biofuels industry to plan for a long-term development, Argentina will be able to incentive foreign investments in this field,” said Carlos St James, president of the Argentine Renewable Energies Chamber (CADER).

“If Argentina has not received as much investments for renewable energies as other countries in the region, [it] is because its external debt has positioned the country below the investment grade, and also due to its insufficient electrical infrastructure,” he added.

According to CADER’s statistics, Latin America received investments in 2009 for about $10bn (€7.1bn) for development of renewable energies, although over $8bn of them went into the Brazilian market.

“This situation is currently changing, since investment returns are in descent in Brazil and investors are looking for better margins in other Latin American markets,” said the president of CADER.

According to the chamber, Argentina has been consistently increasing biodiesel production, and went from being the seventh-largest producer in the world in 2007 to positioning in fourth place by the end of 2010.

“And [it] is not a minor detail that Argentina has showed this important growth in production without enjoying some of the advantages the main biofuels producing countries have, such as easy access to financing, investments from venture capitals, among others,” said St James.

On the status of the internal biofuels market, St James stressed that local producers will benefit from the government’s decision to unfreeze local fuel prices.

“Since the international price for soybean was rising while local fuel prices were frozen, local biofuels producers were selling biodiesel at a loss in the internal market. Now these conditions will probably change,” said St James.

The Clean Energy Congress Argentina 2011 takes place in Buenos Aires and is organised by CADER.

($1 = €0.71)

By: Cristina Kroll
+1 713 525 2653

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