Argentina creates biofuels chamber to boost green fuel development

Argentina is a potential biofuels superpower. Already one of the world's leading agricultural producers, the country recently approved an ambitious piece of legislation on biofuels. The policy work has been remarkable in its comprehensive scope: not only has it resulted in a series of technical and fiscal measures aimed at promoting secure investments in the sector, it also took into account the potential social benefits of a biofuels industry (earlier post).

Now the country's nascent bioenergy sector has created the Argentine Biofuels Chamber (ABC), a professional international trade association that will coordinate and interact with a broad range of cooperators from the public and private sectors as well as academia.

ABC's membership is comprised of foreign and Argentine feedstock and feedstock processor organizations, biofuel suppliers, fuel marketers and distributors, fellow industry associations, and technology providers.

The Argentine biofuel industry is in its infancy and needs to be nurtured to have sound laws enacted and comprehensive information available to all participants.

Hence, ABS's stated goals are:

• To promote international trade, foreign direct investment and biofuel technology transfers to Argentina;
• To promote free commerce and efficient markets and the use of ethical standards within the community;
• Through its activities, to increase economic development in Argentina and well-being of its inhabitants;
• To develop and strengthen ties between its members and other institutions, both public and private, domestic and foreign; with an eye to developing a world-class biofuels industry second to none in the world.

Launched recently in Buenos Aires, its founding members include US investors looking to break into the booming biofuels industry, European biofuel associations eager to purchase the sector’s output, and international vendors seeking to sell equipment and services:
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Eearlier, Argentina had already signed a biofuel cooperation agreement with Brazil, the regional leader in the field (earlier post), but the ABC tries to take cooperation forward to a more global scale.

Argentina is the third-largest global producer of soybeans, with estimated soybean area and production of 41.3 million metric tons (MMT) and 15.5 million hectares (MHAS) respectively for the marketing year 2006/2007 (MY2006/07), according to the US Department of Agriculture’s Foreign Agricultural Service (FAS).

Argentina enthusiastically embraced the use of Genetically Modified Crops (GMO) crops a decade ago, and now upwards of 98% of the country’s soybean production is GMO. Argentina is the world’s second largest producer of GMO crops after the United States.

Glyphosate-tolerant (“Roundup-Resistant”) soybeans were the first GMO crop introduced into Argentine agriculture. The rate of adoption places Argentina second only to the US in the use of this type of soybean.

The current Argentine soybean economy is geared almost entirely towards exports, with only 2% of harvested soybeans reaching the domestic market. Thirty percent is exported as grain and 68 percent is processed by the oilseed industry within Argentina. Ninety-three percent of soybean oil and ninety-nine percent of by-products (meals) are then exported, according to FAS.

Argentina is forecast to supply more than 50% of world soybean oil exports and more than 40% of soybean meal exports in MY2006/07. Major markets will continue to be China and India.

The USDA also estimates Argentina’s sunflower seed production and area at 3.8 MMT and 2.2 MHAS, respectively.

It’s that pool of potential feedstocks that the nascent Argentine biofuels industry would like to tap.