Argentina’s biodiesel industry taking off

Over the past few years the production of biodiesel in Argentina has increased rapidly. With neighbour Brazil as the world’s ethanol king producing sugarcane-based ethanol, Argentina has been trying to catch-up using its image as the world’s biggest soybean exporter. Biodiesel is appreciated as one of the fuels used to reduce pollution and could serve as one of the replacements for petroleum fuels in the future. Therefore the Argentinean government embraced all initiatives in this direction and presented the so called Biofuels Law in 2006, ordering gasoline stations in the country to blend their diesel and ethanol with at least 5% of biofuels, starting from January 2010. Nowadays Argentina is thinking even further ahead. Its main goal is to reduce its independency on imported diesel and to benefit from one of the major trends in the global alternative energy industry today: the biofuel industry.

Argentina could not have chosen a better moment and a better market to explore and to exploit. The world knows Argentina as one of the world leaders when it comes to the export (95%) of vegetable oil and soybean. But instead of facing reducing prices within the soybean sector, it can welcome new opportunities. The country has large tracts of land all over the country that are very suitable for the production of oil crops like soja, sunflower, peanut, rapeseed, safflower, rape, but also non-oilseed crops which may contain oil seed like cotton, that can be used for the production of biofuel. Besides there is the availibility of large suitable surfaces with potential to be exploited and that could be used to keep up with future demand and supply.

The beauty of this goldmine lies in the simplicity of the production, low production (and labour) costs, an immense capacity in combination with governmental support and makes any investment within this industry worthwhile. Especially because biodiesel contains a significant advantage over neighbour Brazil: further developping of biodiesel will lead to refining and selling biodiesel fuel for common transport vehicles like trucks, buses and other commercial vehicles in Argentina, without even the necessity of further conversion. That gives it a big advantage over ethanol, that still needs mixture with petroleum.

Experts expect this biodiesel billion industry to triple by 2015 and consider it wide open to smaller players. About 75 percent of the country's diesel consumption probably will be used by farmers and most likely therefore it can be an option to choose for sell-local principle application by building small versions of refineries in rural areas. Known is that the country produces more than 45 million tons of soy a year, translated in 8 million tons of oil or better: 9 million cubic meters of biodiesel. It appears in this case that the grass is greener in the garden of Argentina…or at least the fuels are…

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