Argentina has natural conditions to become one of the major producers of biofuels. The country is the third world producer and first exporter of soybean oil; the second world producer and first exporter of sunflower oil; and the second world exporter of corn. Argentina´s total grain production for 2006/07 reached a record figure of 95.0 million tonnes. Soybeans, maize and wheat account for almost 88% of total production.

In 2006, the Argentine Congress approved a law (N° 26093) to promote the use and production of biofuels in the country (biodiesel, bioethanol and biogas).

Main aspects of the law:

• 5% mandatory use of biodiesel and ethanol in all diesel oil and gasoline consumption, beginning on January 1, 2010.
  
• Investment incentives for 15 years for domestic market production.
  
• No export subsidies.
  
• The Law gives precedence to projects that satisfy the following criteria:
  . Originating from small and medium companies.
  . Belonging to farming producers.
  . Located in regional and rural economies.
  . Equivalent treatment for foreign investors.

Legal regime´s principal expected effects:

a) Biodiesel

• Projected diesel oil consumption for 2010: 11.6 million tonnes.
  
• 5% mandatory use of biofuels, the necessary production of biodiesel is: 600,000 tonnes.
  
• Necessary production of vegetable oil = 625,000 tons. (8% of total current production).
  
• Argentina’s biodiesel domestic consumption accounts for only 6% of total vegetable oil production.

b) Bioethanol

• Projected gasoline consumption for 2010: 3.0 million tonnes.
  
• 5% mandatory use of biofuels, the necessary production of ethanol is: 600,000 tonnes.
  
• Necessary Area for maize = 80,000 hectares (2% of total current planted area).
  
• Necessary maize production = 550,000 tonnes (2% of total current production).

According to the National Association of Biofuels and Hydrogen there are currently five biodiesel plants under construction in Argentina and three in the pipeline, which will result in a total production capacity of 1.5 million tonnes. On bioethanol, there are two more plants in the pipeline, with an expected total production capacity of 200,000 tonnes.

One of Argentina´s biggest oilseed companies: Aceitera General Deheza (AGD), started production of biodiesel on 17th September 2007 and its first export took place on 25th October 2007. Its new plant produces “100% biodiesel” from soybean oil (technically known as “Soy Methylester”) and it is expected to yield an annual production of 240,000 metric tonnes.

Main objectives of the Argentine policy on biofuels:

• To create a new industry.
  
• To add value to grain and vegetable oil production since Argentina exports 70 per cent of the corn and 90 per cent of the vegetable oils that it produces.
  
• To allow the development of energy crops through new GM crop generation, improving productivity and better energy results.
  
• To have a favourable impact on the environment.
  
• No expansion of arable land, no harms to biodiversity.

Some important contacts in the Argentine public sector:

•     Biofuels Office, National Energy Secretariat (www.energia.gov.ar / obakov@minplan.gov.ar)
•     Biofuels Office, National Agriculture Secretariat (www.sagpya.gov.ar / malmad@mecon.gov.ar)
•     National Institute for Farming Technology (www.inta.gov.ar / hilbert@cnia.inta.gov.ar)

Some important contacts in the Argentine private sector:

•     National Association of Biofuels and Hydrogen (www.aabh.com.ar / info@aabh.com.ar)
•     The Argentine Oil Industry Chamber (www.ciaracec.com.ar)
•     Argentina´s Maize Association (www.maizar.org.ar / info@maizar.org.ar)
•     Argentina´s Soybean Association (www.acsoja.org.ar / contacto@acsoja.org.ar)
•     Argentina´s Sunflower Association (www.asagir.org.ar)
•     Aceitera General Deheza (www.agd.com.ar )
•     Repsol YPF (www.repsolypf.com )