Argentina’s domestic biodiesel industry eyes tax break benefits

Argentina’s decision to extend the exemption on biodiesel duties could open up new markets for domestic output, according to a consultant with Argentine biofuels chamber Carbio, told Agricensus.

Through government decree 147/2018, the government extended tax breaks for pure biodiesel products as well as biodiesel used in liquid fuels.

“This decision is really positive and promising for the domestic biofuels industry as it might generate future business opportunities such as direct contracts between biofuels producers and fuel stations and bus companies willing to use more biodiesel,” said Gustavo Idigoras, a consultant with Argentine biofuels chamber Carbio.

The government decided to extend the tax breaks so that biofuels can play a part in  diversifying the country's energy mix. However, Idigoras said the benefits from the decision would depend to a large part on biodiesel prices in the domestic market as biodiesel is still less competitive compared to traditional fuels.

According to statistics from the country’s energy ministry, total production of biodiesel in the country totaled 2.87 million mt in 2017, up from 2.65 million mt the previous year.

During the final quarter of 2017, total biodiesel production amounted to 861,442 mt, up from 728,152 mt in Q4 2016.

The government also reported that total sales of biodiesel to be used as liquid fuels in the domestic market was  1.17 million mt in 2017. Some of the main customers in this market were YPF, Axion Energy, Petrobras and Shell, according to official statistics.

The provinces with the highest production of biodiesel are Santa Fe, Buenos Aires, La Pampa, Entre Rios, Santiago del Estero and San Luis.

Buenos Aires province has recently announced a plan for the production and marketing of biodiesel, with the aim of raising local production to 50% of the volume of processed soybean in the province, up from 13% currently.