Spain closed the entry of Argentine biofuel

The chances of the Spanish government begins to restrict the entry of Argentine biodiesel are increasing, large companies with interests in the Iberian sector-such as Abengoa, Acciona and Isolux-are pushing the authorities with increasing momentum for the Barrier para-tariff is finally implemented.

"In the last hours were increased chances of a ministerial order is issued in this regard", said the program Infocampo Radio (Belgrano / AM 950) Claudio Molina, Executive Director of the Argentina Association of Biofuels.

"Spain has increased its installed capacity of biodiesel production (based on rapeseed oil), beyond the real possibilities of domestic demand, this led to excess capacity and seek to resolve the issue leaving players very efficient subject, including Argentina. Business is a struggle, "said Molina.

In recent months officials from Foreign Ministry and the Ministry of Federal Planning, together with the local entity that represents the main export industries of biodiesel (Carbio) initiated efforts in Spain to try to reverse the measure. "They have done very serious work, but bargaining is complicated," Molina acknowledged.

"If the market closes in Spain, an industry as efficient as Argentina will be able to rebuild their structures to other markets in a few months are going to rearrange the many and Argentina will be able to get those 400,000 to 500,000 tonnes of biodiesel Annual exports going to Spain, "projected.

In 2011 exports are expected to reach Argentine biodiesel 1.40 million tons, of which more than 90% will go to various European Union nations.

"In the short term the measure affects the local biodiesel industry, but in the medium term the situation will mend in other European markets or other alternative markets," said Molina.

Regarding the domestic market, the Argentine government implemented in February 2010 to distribute a quota of 859,820 tons of biodiesel from 19 biofuel producing companies to meet mandatory cut of 5% in diesel provisions of Law 26,093. Then in mid July last year, took effect extending the mandatory cut to 7%.

"The big problem we have today is Argentina's leading oil company, YPF is not being cut (biodiesel) to 7%, but doing it at 5%; hope that this issue is resolved because there is a standard that establishes the cut diesel with biodiesel should be 7%, "said Molina. "Today in the domestic market have been used for some 60,000 tonnes of biodiesel per month and should reach more than 70,000 tonnes," he said.

Source: DERF