Maritime Biodiesel: beware, Argentina loses the boat – 05/11/2019

By Ned Molloy

Special for Clarín Rural

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Argentina is a world leader in biodiesel. While Brazil is the largest producer and serves domestic demand, Argentina is the world's largest exporter of biodiesel. And at a time when dollars are scarce, The industry could research every possible export opportunity. Unfortunately, as biofuels take off in the giant maritime industry around the world, Argentina is losing the ship.

Earlier this year, biofuel testing was conducted by NYK in Japan and CMA CGM in France, in collaboration with IKEA. Later this year, Maersk, the world's largest container company, will test blends of biofuels during a round trip from Rotterdam to Shanghai. All use European biofuel suppliers. Where is Argentina in these developments? Nowhere.

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Two of the major agricultural commodity sectors could benefit from the current global trend towards cleaner shipping standards: biodiesel, produced primarily from soybeans, and ethanol, produced primarily from sugarcane.

With regard to ethanol, ISO is already developing international safety standards for ethanol and methanol as marine fuel. There are already seven oil tankers and one ferry that operate commercially with the same methanol as the fuel, and it is expected that at least four more will come into service this year.

Stricter standards on CO2 developed at the IMO encourage the adoption of both types of biofuels in maritime transport. In fact, it could help the Argentine sugar industry to adapt and prosper.

The global sugar market is combating slower growth in demand and excess supply. This perspective is one of the major concerns of cane processors in Argentina.

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Sugarcane processors tend to have some flexibility in their share of sugar production relative to that of ethanol, and last year the switch to ethanol took place. turned out to be a wise decision. 2019 is expected to be another year of strong ethanol production, since the biofuel continues to give better yields to factories.

The government's policy is already aimed at boosting demand for biofuels at the national level. But the export opportunities are much bigger.

The global marine industry accounts for 5% of global oil demand; according to the IEA, more than India. He currently spends about $ 150,000 a year on fuel.

Argentina should take advantage of a large part of this huge market with its biofuel exports, a new reliable flow of foreign currency (the fuel used for transport around the world is traded in dollars) and gain international influence in helping global trade to be greener. .

However, Argentinean biodiesel exports have faced strong winds. In recent years, the US government has applied duties on Argentine biodiesel imports, which has had a direct negative impact on the volume of trade.

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In the EU, Argentina is facing anti-dumping duties on its biodiesel, accused of selling cheaper abroad than in the domestic market. However, maritime transport fuels (also known as "bunker fuels") consumed on the high seas are outside the regulatory scope of the US or the EU.

The rules governing fuel standards are developed by the International Maritime Organization of London, of which Argentina is a member. That's why you should take this opportunity to guide policy making in this country in favor of domestic biofuel producers. For that, it must support the adoption of CO2 standards for maritime transport that stimulate demand.

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That's why the IMO summit that kicked off May 7 in London (known as the MEPC74) is so important: to boost market share of biofuels in the shipping sector, Strict measures to reduce CO2 emissions will be needed. this should be agreed in a few weeks.

Last year, the IMO delegates from Argentina, based in London and largely unknown to the country they are supposed to represent, played a stalling role alongside the Saudi Arabia and have tried unsuccessfully to weaken the objectives. CO2 reduction in the IMO.

This year, it is time to start paying more attention to what they do and if this is in the interest of the economy in this time of crisis. If they do it well, Argentina can sell biofuels to an industry accounting for 80% of all international trade.

Editorial note: the author is marine consultant and fuel