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Argentina's biodiesel industry idles as global rivals expand
🇦🇷 Argentina /Energy & Infrastructure

Argentina's biodiesel industry idles as global rivals expand

From La Nación · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Argentina's biodiesel industry faces significant underutilization of its production capacity due to insufficient mandatory blending mandates.
  • Industry leaders warn that the country is losing competitiveness and markets by not developing its biofuel sector, unlike Brazil, the US, and Indonesia.
  • Proposed legislative initiatives aim to increase biodiesel and bioethanol blending percentages to boost domestic demand and industry viability.

Argentina's once-promising biodiesel industry is struggling with idle plants and unutilized investments, despite significant capital infusion. Industry executives from major players like Aceitera General Deheza (AGD), Louis Dreyfus Company (LDC), and COFCO International voiced concerns at the Acsoja 2026 Seminar in Rosario.

We have plants with fantastic technological levels, scale, and efficiency that are stopped or partially stopped.

— Luis FontánHead of Trading at Aceitera General Deheza SA, describing the underutilization of the country's biodiesel production capacity.

Luis Fontán, Head of Trading at AGD, highlighted the paradox: "We have plants with fantastic technological levels, scale, and efficiency that are stopped or partially stopped." He attributed this to a flawed market structure, pointing out that Argentina's current biofuel law, regulated prices, quotas, and a small, unmet mandate are insufficient to drive demand.

While acknowledging recent improvements in the macroeconomic climate and positive signals for investment, industry leaders agree that biofuels remain a critical area needing reform to regain competitiveness. The current mandatory blend of 7.5% biodiesel in diesel and 12% bioethanol in gasoline is far below what's needed to utilize the industry's 4.4 million-ton annual production capacity.

Argentina today has a biofuel law, it has regulated prices, it has quotas, and it has a small mandate that is not met.

— Luis FontánHead of Trading at Aceitera General Deheza SA, criticizing the current regulatory framework for biofuels.

This inaction contrasts sharply with global trends. Brazil mandates 15% biodiesel (moving to 16%), and Paraguay recently set a target of 20%. Industry representatives argue that Argentina's failure to adapt is causing it to cede ground in a strategically important global market, leading to lost competitiveness, markets, and value addition.

Brazil has 15% and is going to 16%. Paraguay just issued a regulation to go to 20%. In Argentina we are at 7.5%.

— Luis FontánHead of Trading at Aceitera General Deheza SA, contrasting Argentina's blending mandates with those of neighboring countries.
DistantNews Editorial

Originally published by La Nación in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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