Argentina's Senate committee advances biofuels overhaul, raising blending mandates and opening market to competition

Argentina's Senate committees have advanced a new biofuels regime that would lift mandatory blending levels while opening more of the market to private competition.

The joint plenary of the Mining, Energy and Fuels Committee and the Budget and Finance Committee issued its report on Thursday. The text combines seven proposals submitted by senators including Patricia Bullrich, Beatriz Ávila, José María Carambia, Natalia Gadano, Alejandra Vigo, Carlos Espínola and Flavia Royón. Lawmakers made successive changes during the debate, particularly over the position of small biodiesel companies classified as “non-integrated companies.”

The proposal would initially retain Argentina's current 7.5% biodiesel blend in diesel. Twelve months after the law's passage, the mandatory level would rise to 10%. Bioethanol blending would increase from the current 12% to 15% after the first year.

Within the 15% bioethanol requirement, 6% would remain reserved for sugar-cane ethanol and another 6% for corn ethanol. The remaining 3% would be open to competition, without a predetermined allocation by feedstock. The text also says no company could control more than the volume corresponding to its allocation, a provision intended to prevent dominant positions.

The biodiesel transition would last longer. Non-integrated small and medium-sized companies, meaning firms that do not belong to business groups owning vegetable-oil and protein-meal plants, would initially retain the entire 7.5% mandatory blend. The broader proposal follows the direction of an earlier initiative backed by Bullrich and other La Libertad Avanza senators, which sought a more open and deregulated market, more investment and greater use of biofuels. The debate added transition and protection mechanisms for selected producers.