Oleochem Analytics – The Argentine Senate is expected to vote this week on a new biofuels draft bill advocated by lawmakers from Argentina’s ruling coalition Frente de Todos, stipulating that the biodiesel mandate will be reduced from the current 10% to 5%, although the Energy Secretariat would have the flexibility to increase the blending mandate or reduce it to as low as 3% depending on market conditions.
The Argentine Chamber of Deputies gave preliminary approval on July 2 to approve the draft bill.
The law was preliminary approved by the Deputies overnight, said the Corn Ethanol Chamber group CEO Patrick Adam in a radio interview July 3. The draft bill now only needs the Senators approval, who are due to meet this week to discuss the draft bill.
“This draft bill limits the desire for the Argentina economy to be focused on domestic natural resources, since the message that comes down from the authorities is that grains’ value addition domestically is not intended, but rather its value is in exportation as feedstock”, Adam said.
The potential approval of the draft bill is likely to increase the volume of soybean oil available for export from Argentina as the volume of soybean oil that will not be used for biodiesel production will have to go to the export market, analysts say.
The current bill stipulates that the new biodiesel regulation will be valid until the end of 2030 and could be extended for five more years. In case of approval, it could mean an additional 500,000 tons of soybean oil directed to the export market, analysts estimate.
Argentina’s current Biofuels Law, adopted in May 2006, expired last week, following a two-month extension. The original law was set to expire on May 12.
The bioethanol mandate will remain at 12%, with a division of 6% for sugarcane-based ethanol and 6% from corn-based ethanol. The bill stipulates that the ethanol mandate could also be increased or reduced by the Energy Secretariat depending on certain market conditions.