Biodiesel: the reopening of the European market could generate currencies for Argentina for nearly $ 1,000 million

Biodiesel sales in Europe would generate foreign exchange for nearly $ 1 trillion a year and reactivate the totally stopped petroleum facilities, mainly in the Gran Rosario.

With shipments to Europe, one could use up to 50% of the installed oil capacity, sector that still hopes to enter into a similar deal with the United States and obtain a larger sales niche.

This was expressed in dialogue with InfobaeVíctor Castro, executive director of the Argentine Chamber of Biofuels (CARBIO), who said that if the administrative deadlines were met by the European Commission, "we hope to be able to make the first shipments by the beginning of March next "

"The biodiesel export industry is totally halted, because of the restrictions in force in Europe, and with the possibility of selling 1.2 million tonnes, in accordance with the agreement concluded with Brussels for 2019 -, we would work below 50% of the production capacity of the oil companies dedicated to the export of biofuels, that is to say the large companies integrated into the mill, "Castro explained.

In addition, explained CARBIO: "We could work perfectly to supply the domestic market and replace imports." Last November, more than 3 million cubic meters of diesel were imported into Argentina, the oil sector having sufficient capacity for biodiesel that allows to replace this import and also generate an industrialization of the oil and the attraction offered by the protein flour.On the other hand, the ability to give Argentine labor ".

A way forward also with the United States

As far as the private sector is concerned, as Castro has admitted, the agreement with the European Union is taken into account in order to be replicated also in open negotiations with the United States. "We are always looking for these types of alternatives and bilateral negotiations to gain external access. We hope to repeat a similar pattern with the United Statesalthough no work has been done to this end ".

The work done by the Argentine Foreign Ministry before Brussels was hailed by the fact that, under the agreement, reduced tariffs of 6.5% were applied to Argentinean biodiesel, ceilings at the end of the year. export and competitive minimum prices for local deliveries. There is no doubt that this tariff will be far removed from the countervailing duties of 25 to 33.4% proposed to impose Europe. Agreed shipments may also have an increase of 2% per year for sales made over the next five years. That would be a company that would cost between $ 900 million and $ 1,000 million a year..

According to Victor Castro, "it was possible to reach some kind of agreement that would set a frame of reference for entering Argentine biodiesel exports to Europe and thereby avoid unwarranted measures, which would be based on subsidies denounced by Brussels.It is not ideal but the rules of the game offer this alternative: limited volume and minimum price but with a horizon to be able to enter this block ".

For the adoption of an appropriate pricing system for Argentine biodiesel entering Europe in the coming months, CARBIO said it should take "a reference to international prices, which will be based on a costing badessment, mechanisms self-managed enterprises for which the European Commission has adopted administrative procedures with other countries and products ".

"Minimum prices imposed will not be as restrictive as a tariffit will be necessary to establish something that is viable for both parties and not just a statement of intent. We now hope to be operational by the beginning of March, as soon as possible, because everything depends on the administrative conditions of the European Commission, "said Castro.