Argentina to increase biodiesel blending requirement in diesel

24 April 2012 23:31  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Argentina will gradually increase the biodiesel blending requirement in diesel fuel, financial daily El Cronista reported on Tuesday.

The government plans to increase blending requirements to 10% from the current 7% between May and October by increasing requirements by 0.5% each month, El Cronista said quoting an unnamed source familiar with the plan.

Spain retaliated against Argentina on 20 April, with a measure to curtail Argentine biodiesel imports following the expropriation of YPF. The Spanish-based energy producer Repsol YPF owned a majority stake in the YPF.

The Argentine biodiesel sector does not expect the increase in the blending requirement to absorb enough of the supply available.

“The higher requirements for blending will help a little, but the loss of the Spanish market is irreplaceable,” a seller said.

Most of biodiesel used in Spain is imported, with much of the imports coming from Argentina.

Argentine President Cristina Fernandez de Kirchner sent a bill to the Senate last week, under which the government would obtain a 51% stake in YPF, effectively expropriating the company amid escalating tensions and accusations of continued decline in oil and gas production in the country.

Argentine biodiesel production for 2012 is projected at a record 3bn liters (793m gal), with Argentina becoming one of the world’s top producers, according to the US Department of Agriculture Foreign Agriculture Service report.

Argentina is expected to remain the most important biodiesel exporter in the Americas, as exports should reach about 2.5bn litres by 2020, according to a Food and Agriculture Organisation (FAO) and Organisation for Economic Co-operation and Development (OECD) report looking forward to 2020.

“The greatest biodiesel producer in the developing world will still be Argentina, which will account for about 25% of total biodiesel produced in the developing countries and 8% of global biodiesel production by 2020,” the report said.

Soy Methyl Ester (SME) biodiesel values were assessed steady amid lack of business at $1,231-1,251/tonne (€936-951/tonne) FOB (free on board) Rosario, Argentina, according to ICIS Pricing.

The Argentine Ministry of Agriculture did not respond to requests for comment.



By: Leela Landress
+1 713 525 2653



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