Argentine power plants to require 10% biodiesel blend

Argentina, one of the world's leading biodiesel producers, will require a 10% biodiesel blend in fuel burned for power generation, according to government officials.

In a bid to boost the struggling biofuels sector and increase the use of 'green fuels', the blending requirement for biofuel in the diesel used to run local vehicles will also be stepped to 10% in January, planning minister Julio de Vido has announced.

Biodiesel producers have been pushing hard to convince the government to raise the local blending requirements for mixing biodiesel with conventional fuel to compensate for European trade lost after the EU imposed strict anti-dumping duties on Argentinian imports earlier this year.

The government has said it wants to raise the biodiesel blending requirement to 20% by 2015, but has so far struggled to increase the actual blend much higher than the original 7% mandate set in 2006.

According to the Agriculture Ministry, Argentina exported 755,200 metric tons of biodiesel from January to September of this year compared to the 1.3 million tons shipped during the same period in 2012, according to Argentine biofuels chamber Carbio.

The country has invested heavily in turning soybeans into biodiesel. Argentina's 11 biggest biofuel producers spent about $500 million to build biodiesel plants in recent years, says Carbio.

Biodiesel exports had been taxed at 20%, compared to 32% for the soyoil used to make it. Today, biodiesel exports are charged a sliding tax that the authorities review every 15 days. The government also sets prices that it says guarantee producers a fixed margin of 4%.

Argentina has biodiesel production capacity of four million tonnes a year, with 850,000 tonnes of that currently going to the domestic market, says de Vido.