Argentina boosts ethanol blend to 12pc

OREANDA-NEWS. February 08, 2016. Argentina is increasing the ethanol blending mandate in gasoline to 12pc from 10pc, following up on a long-held industry objective.

"The increase in the ethanol blend in gasoline from 10pc to 12pc guarantees growth in the region," president Mauricio Macri said during a visit to the sugar-producing northern province of Tucuman.

"The alcohol will help us to not pollute the environment and end those corruption-filled contracts that led us to import (fuel)," said Macri, who took office on 10 December.

Argentina produced 670,004 m3 (23.66mn ft3) of ethanol in the first 10 months of 2015, a 24pc increase from the same period of 2014, according to the latest energy ministry figures.

Out of the total, 394,676 m3 was corn-based ethanol, a 31pc increase from the previous year, while 275,328 m3 was sugar-based, a 15pc increase.

Sugar-based ethanol producers receive a slightly higher remuneration for their product, set at Ps10.3/l (\\$0.7) in January, up by 5pc from December. The price of corn-based ethanol for January was lower at Ps8.02/l, marking a 5pc increase from the previous month.

Ethanol production has witnessed explosive growth in recent years, soaring by 42pc in 2014 to 671,121 m3 and by 88pc in 2013 to 472,380m3.

Argentina has nine sugar-based ethanol producers and five corn-based producers.

The ethanol industry depends on the local market, a sharp contrast with the once vibrant export-oriented biodiesel industry that has been struggling to stay afloat in recent years amid low international oil prices and EU anti-dumping tariffs imposed in late 2013.