Karina Grazina

Argentina’s status as one of the world’s leading grains producers would appear to make it a natural to assume a leading role in the growing biofuels industry

BUENOS AIRES, Argentina: May 14, 2007.- But some Argentine farmers say the country is lagging in attracting investors who have pledged billions of dollars to build plants around the world to produce biofuels like ethanol and biodiesel, made from crops such as sugar, corn and soy.

“There is a shortage of ambitious projects, and when I say ambitious, I mean massive,” said Julio Cesar Gutierrez, a soy producer who helped organize a two-day conference looking at Argentina’s biofuels industry, which ended on Friday.

Biofuels are increasingly seen as a cleaner, renewable energy alternative to fossil fuels.

Argentina is the world’s leading exporter of soyoil and soymeal and is the third-biggest producer and exporter of soybeans after the United States and Brazil.

The world’s No. 2 corn exporter, Argentina is also well-positioned to make ethanol, which can be produced from corn or sugar cane.

Hoping to jump-start the biofuels sector, Argentina has granted companies a series of tax breaks to invest in the sector.

The Argentine Congress last year passed a law requiring that within three years at least 5 percent of the country’s diesel fuels should come from biodiesel and the same percentage of ethanol must be mixed with gasoline.

But there have been few announcements of investment plans on the scale of a recent US$480 million pledge by Italian companies to build four biodiesel refineries in neighboring Brazil, home to the world’s most advanced biofuels market.

“Perhaps it’s because this is a country so dependent on the state and we need it to accompany us a bit more,” Gutierrez said.

TRYING TO MOVE FORWARD

Some Argentine producers are still torn between whether to dedicate productive lands to food production or meet increasing biofuel demand, said Beatriz Nofal, director of Argentina’s National Investment Promotion Agency.

Still, she said at least five biodiesel plants are currently under construction in Argentina which will have a production capacity of 1 million tonnes.

The investors are Argentine companies Aceitera General Deheza (AGD), Molinos Rio de la Plata and Vicentin, along with major players Bunge Ltd., Glencore International AG, Cargill Inc. and Louis Dreyfus.

Nofal acknowledged that some producers were struggling to find financing to set up biodiesel projects.

“There are some initiatives, but there is no complete financing structure,” she said.

Also throwing up potential obstacles is a lack of rules on biofuel exports, said Fernando Vilella, an engineer at the School of Agronomy at the University of Buenos Aires.

“There are no clear regulations on export projects,” he said.

Yet some international investors are forging ahead.

On Thursday, Canada’s Dynamotive announced it signed an agreement to invest up to US$140 million to build six plants in the northeastern province of Corrientes, using lumber and paper industry waste to make biofuels.

The first plant is expected to begin operating in 2008, Andrew Kingston, the president of Dynamotive, told Reuters.

Spanish energy company Repsol YPF has also said it was investing up to US$30 million in biofuels production in Argentina.

On Friday, Repsol YPF launched what it said was the first commercial biodiesel produced in the country, called “Gasoilbio,” a blend of diesel and fuel made from vegetable oils and animal fats.

(Reuters)

 

Enlaces Relacionados

• EU PLANS TO LIMIT BIOFUEL IMPACT ON FORESTS
• GENETIC MODIFICATION SEEN KEY FOR FUTURE BIOFUELS
• PROBLEMS BREWING AS EU FARMERS SWITCH TO BIOFUELS
• UK BIOFUELS PUSH LACKS GREENHOUSE TARGETS - REPORT
• BIOFUELS INDUSTRY GROWS IN LATIN AMERICA