Governors' Biofuels Coalition

BUENOS AIRES (Reuters) – Argentina will more than double the required use of ethanol in gasoline from next year as part of efforts to diversify away from the use of fossil fuels, an executive from a bioethanol industry body told Reuters on Friday.

“The plan of (Argentine President) Mauricio Macri’s government is to increase the ethanol blend in fuel from the current 12 percent to a maximum 26 percent, following in the steps of Brazil’s decades-long policy,” said Patrick Adam, executive director of the country’s corn ethanol chamber.

An Energy Ministry spokesman said the government’s aim was indeed to increase the required use of ethanol in fuel although specific targets had not yet been fixed.

At a climate change conference in Paris last year, countries signed up to rein in rising carbon levels, gradually reducing the world’s reliance on fossil fuels.

But using land to produce fuel rather than grow food also has its detractors.

For Argentina, which has been suffering from an energy deficit for some years and produces all the ethanol it uses from corn and sugar cane, the move is logical.

In February, it increased the amount of ethanol used in fuels by 2 percentage points, boosting its sugar industry, which has been battered by low international prices.

“An increase to 26 percent would lead us to more than double our current production and invest $400 million,” said Adam.

Argentina currently produces around 25 million tonnes of corn annually, most of which is exported. It has five ethanol plants.

It should not be difficult for automakers to adapt, Adam said.

“Argentina is already making cars for the Brazilian market and vice versa, so that will simplify operations,” he said.

Argentina first demanded that ethanol be mixed with gasoline at a 5 percent ratio in 2010.

 

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