Argentina now third largest producer

Web exclusive posted Oct. 20, 2008 at 3:36 p.m. CST

Argentina jumped to third place in world biodiesel production for 2008, tripling its capacity from 2007. On Oct. 15, the Argentine Renewable Energies Chamber released a summary of its first full analysis of the Argentine biodiesel market, which includes a list of producers, analysis of present and future capacity, as well as recommendations.

The Outlook for the Argentine Biodiesel Market states that Argentina will produce more than 10 percent of the world's biodiesel in 2008 making it the third largest world producer with sales in excess of $1.5 billion. "However, to guarantee the industry's full potential in Argentina - and establish itself along with Brazil as a biofuels powerhouse - the industry needs to be nurtured and protected far more than has been done thus far," said Carlos St. James, president of the Buenos Aires-based organization, in the report.

According to the report, in 2008 only Europe and the United States produce more biodiesel than Argentina. The total installed biodiesel plant capacity in Argentina will grow 150 percent from 2007 to 2008, the report states, with similar growth expected during 2009. New production capacity will increase 840,000 tons (251 million gallons) in 2008 to a record total of 1.4 million tons (419 million gallons) from 18 commercial biodiesel facilities averaging 83,000 tons per year (25 MMgy). The number of plants is expected to nearly double to 34 by the end of 2009.

A B5 mandate which will begin in 2010 is expected to create a domestic market for 625,000 tons (187 million gallons) annually.

The report also states that from January through September 2008, producers have exported approximately 750,000 tons (224 million gallons) of biodiesel from Argentine ports. "Over 90 percent of this production makes a first stop in the United States, where it is mixed with U.S.-made biodiesel and allowing for the entire shipment to qualify for the local subsidy. From there it typically leaves again for its final destination, Europe, but with far more attractive margins," the report stated.

One of Argentina's greatest attractions is the abundance of feedstock in the country, according to the report. Argentina is the world's largest exporter of soy oil. In addition, the country favors biodiesel use by eliminating the 32 percent export tax paid by soy oil exporters giving biodiesel made in Argentina a cost advantage.

"This study is a contribution of the Argentine Renewable Energies Chamber to help give structure, order and solid foundations to an industry that has so much potential for our country," St. James said.