After the diesel crisis, the industry asks for clear rules for the medium term
CORDOBA.- The biofuel industry and, especially that of biodieselcelebrated the decision of the national government to increase the mandatory cut of diesel to alleviate the existing shortage. Kirchnerism itself had been the one that sanctioned the law a year ago that dropped from 10% to 5% cut with biodiesel in diesel and maintained at 12% that of bioethanol for gasoline (6% for cane and 6% for corn). Now, urged by the claims, it has raised the first to 12.5% (SMEs will supply up to 7.5% and there are five extra points for all suppliers).
Each one percent increase in biodiesel cut rrepresents some 11,000 cubic meters per month; the sector is in a position -according to its referents- to supply up to a 20% mixture. Clearly, companies are ramping up their operations dynamics, although adjusting facilities takes “some time.”
According to sources consulted by THE NATION, SMEs are waiting use the 70% of its installed capacity; is that the companies covered by Law 27,640 could expand the supply “above 10%”. Three referents of the sector agreed that, as the resolution to raise the cut allowed cereal companies to participate in the internal market, there are some that eThey send less soybean oil to the little ones. From those companies, they rejected that version.
the consultant veronica geese points out that the SME industry is “better” but warns that it was “badly hit” after a long period working at half machine. “Several could not resist the drop in the biodiesel cut.” In his opinion, it is not clear that, in the future, there will be “a different look.”
“I am not hopeful that there will be a positive vision,” he adds. What they did before shows that bios are not part of their long-term view.” As an example, she indicates that in the latest draft of the National Plan for Adaptation and Mitigation of Climate Change, they do not appear. The key to maintaining the promotion of biofuels is, precisely, decarbonize the economya requirement that also applies to foreign trade that calls for environmentally friendly productions.
The executive director of the Argentine Biofuels and Hydrogen Association, Claudia Molina, insists that raising the cut was an implicit acknowledgment of the mistake made in lowering it by law. His expectation is that he will advance the project presented in Deputies by the Córdoba Federal and Identidad Bonaerense blocks, which brings the mixture to 20%. “The industry, of course, has been revitalized since June 16 when the proportion rose,” he describes. matches that the price of oil fell a lotwith which the sale of free biodiesel is competitive compared to imported diesel.
He underlines that the production capacity of the biodiesel industry in 3.9 million tons per year is “intact”. For Molina this year, exporters will have a surplus because they “hardly” reach the quota of 1.2 million agreed with the European Union.
From the Pan American Chamber of Advanced Biofuels, its president Axel Boerr estimates that this month will be the best of the “last five years” for biodiesel producers: “We came from difficult times; last year we operated for three months; in 2021, six and in 2020, nine. We were more and more dead”. He is concerned that the national law is not yet regulated, “so there is always room for arbitrary decisions.”
“To produce you need price and volume. We were between 2,500 and 3,000 tons of cubic meters per month and now it has grown by half -he adds-. As far as the price path is concerned, we have two more months agreed; if the trend continues until the end of the year, we are in values that pay the real cost of producing biodiesel”.
Regarding the volume, he maintains that it should be re-discussed to which diesel the law refers to when it mentions “totality” since, in fact, the one used by Cammesa (administrator of the wholesale electricity market) is not counted.
Juan Manuel Ritacco, CEO of Grupo Bahía Energía (GBE), describes the increase in the mixture as “very good news” in the “short term” because it will help to resolve the shortage of diesel “with natural resources and already installed capacity.” For the long term, it indicates that the country must “deepen the discussion on the generation of cleaner energy, as the world is doing, based on the Paris agreements to reduce emissions and mitigate the negative effects of climate change and warming. global”.
“Our long-term perspective is that expand the share of biofuelsboth to reduce dependence on imports and to expand industry operations, taking advantage of installed capacity and encouraging new investments in line with the challenges of a change in the energy matrix that the world has already begun”, he states.
In this context, Luis Zubizarreta President of the Argentine Chamber of Biofuels, affirms that the producer’s sales that “were already low, are lower. It is costing a lot to buy, originate”. In his opinion, this rise in the cut – which was defined for a term – should be sustained. It ratifies that there are no technical drawbacks to cover 15% or even 20% of the mixture.
The proposal is that oil companies be allowed, “at their discretion, without imposing anything,” to buy more biodiesel. “Should There is the possibility of opting for national biodiesel, which they can do if the prices are competitive.. We ask that they let us compete and, when we are better, we will surely sell and, when not, they will buy from others. We propose that all players compete, ”he indicates.
Biodiesel is a fuel that can replace diesel and has a particularity; is that it comes from vegetable oil, while diesel comes from petroleum. It is a renewable product, it is solar energy transformed into fuel, environmentally more beneficial. The impact on the environment is less than diesel. According to Zubizarreta, our country has the raw material available, with the capacity to replace the import of more than one million tons of diesel with a 100% nationally manufactured product, such as soybean biodiesel.
In the case of corn bioethanol -sugar cane bioethanol is being delivered below the legislated cut because the mills do not have stock- patrick adam, executive director of the Corn Bioethanol Chamber, graphs that the productive capacity of the sector is 870,000 m3/year, equivalent to “more than eight cut points with gasoline”. Along these lines, he emphasizes that they import gasoline “at a loss, wasting currency from the Central Bank. would have to substitute these imports, using Argentine bioethanolwhich provides sustainability and federal employment, in addition to having a competitive price”.
From Bio4, Manuel Ron, coincides with the analysis and anticipates that the company is carrying out a program to expand 50% the volume of production: “More certainty is needed for new plants, since one thing is an increase in installed capacity and another, an investment from scratch.”
Victor Accastello, deputy general manager of the Association of Argentine Cooperatives (ACA) and plant manager of ACA Bio, joins the arguments that the production of bioethanol from corn can supply more than 6% of the legislated cut. “The ceiling is set by the fixed restriction; each company delivers what they assign us; of the surplus, a part goes to export and another to industry”. In Villa María, with a capacity of 272,000 m3/year, the plant is working at full capacity; they export to Chile and the European Union as “sustainable ethanol” (they meet the parameter of saving emissions greater than 70% with respect to the carbon footprint of gasoline).
Corn-based ethanol production increases annually; last April a record of 202,500 cubic meters was registered. The industry, according to a study by the Bag of Cereals of Córdoba, allowed the country to industrialize 10.6 million tons of corn since 2013, despite the fact that the “little price flexibility” of a liter of ethanol in the domestic market “has played against the increases in the international price of cereal” .
The report reviews that the national production of corn was between 56 and 60 million tons in recent campaigns, with a projection of 57 million for the current cycle. In Córdoba, the change was even greater, doubling in recent years, with a peak of 23.7 million tons in the 2020/21 campaign (39.2% of the national total).
Of 2021 ethanol sales, 52% was made from corn and the rest from sugar cane. Córdoba produced 80% of the corn-based ethanol sold for gasoline cutting, which would represent 42% of total biofuel sales.