The project of Omnibus law by Javier Milei has generated intense debates across all sectors. Among biodiesel producers the rift is even deeper National SMEswhich until now enjoyed official protection as the only suppliers to the internal market, with the big oil companies producing biodiesel for export.
The main point of contention of the bill entering Congress is the elimination of sales restrictions in the local market for large companies. From the chamber of regional biofuel producing SMEs they stated that this change directly implies the bankruptcy of biodiesel producing SMEs. Regard 27 factories located in different provinceswhich they estimate employ 2,000 people.
“The proposed text completely changes the spirit of law 27.640 e leaves SMEs exposed to competing under unequal and disadvantaged conditions with large national and multinational oil groups being producers of the raw material and having a much larger production scale, both of which are prohibited under the current law for SMEs,” they explained in a statement.
Meanwhile, from the Chamber of Biofuels (Carbio), which represents the big players in the sector, they applauded the opening of the local market and stated that “will definitely result in improvements in product qualitynew developments in advanced biofuels and other applications, resulting in investment in the sector that will generate more and better options for the consumer.”
“It’s unusual that the most competitive industries are discriminated against and blocked and the market is supplied at very high prices by a few authorized companies because they do not have a free market. This situation reduces the competitiveness of our economy and is paid for by all the inhabitants of our country”, stated the president of Carbio, Luis Zubizarreta.
The bill includes other points that have attracted comments from both sectors. One of them is the elimination of the current percentages of 7.5% for biodiesel and 12% for bioethanolleaving the requesting authority the right to set the cut as it wishes and to modify it with a simple resolution.
“As if sending SMEs into bankruptcy and unpredictably manipulating mandatory cutting percentages wasn’t enough, the proposed law opens up the possibility of importing biofuels for local cutting. This opens up the paradox that In this way Argentina would open the door to the import of biofuels coming from countries that have banned the entry of Argentine biofuel with paratariff measures”, warned Cepreb.
In this regard, Carbio stated: “The free importation of biodiesel or raw materials for the production of biodiesel, now permitted, must have the necessary reciprocity clause with the rest of the countries concerned.”
And regarding the cut-off percentage, large companies have indicated that they consider it important to introduce a “convergence” policy with Mercosur regarding biofuel mandates (especially with Brazil) due to the integration and similarity which can be achieved in the automotive and agro-industrial sectors. fleet, for which mandatory biodiesel cuts of 14% can be established for this year 2024 and increased to 15% by 2025, with the possibility for the control authority to establish a minimum (in exceptional and justified cases) of 10% and to increase it when necessary depending on the energy transition policies to be adopted.
Anyway, Guillermo FrancosMinister of the Interior, assured the representatives of Córdoba, Santa Fe, Entre Ríos, Jujuy and Tucumán, five provinces producing biofuels, that the current reduction in the level, which in the case of bioethanol (sugar cane and corn) is 12 % and for biodiesel, 7.5% “It will not be reduced and we have agreed to continue talking and analyzing these issues, which impact the regional economies of each province,” the official said after the meeting.
Source: Clarin
