Northern provinces put pressure on biofuel law

The provinces of northern Argentina are intensifying pressure on the government to advance legislation regarding biofuels, with a focus on increasing the mandatory blend of ethanol in gasoline. The provinces of Tucumán, Salta, and Jujuy have joined forces to push for the approval of a new law that would raise the required percentage of ethanol in fuel from 12% to 15%. This initiative includes provisions for using both corn-based and sugar cane-derived ethanol, with specific allocations of 6% each, while the remaining 3% will remain unrestricted in terms of its raw materials. Among seven proposed bills, the one introduced by Senator Patricia Bullrich has garnered support from the provinces, along with the maize and sugarcane alcohol industries. These industries include around twenty sugar mills, fourteen of which are located in Tucumán, with the others spread across Jujuy and Salta. The provinces' request comes at a critical time for the ruling party, which relies on the backing of legislators from these regions for the passage of key laws such as the Fiscal Innocence Law and the reform of the Organic Charter of the Central Bank. In March, as international fuel prices rose, the national government allowed oil companies to mix up to 15% ethanol into their blends. At the opening of the II Bioethanol Summit in San Miguel de Tucumán, Vice Governor Miguel Ángel Acevedo expressed confidence in the bill’s approval. He emphasized that the provinces do not seek special privileges but rather the capacity to generate renewable energy through existing resources. “We need investments and for that we require legal certainty,” he stated. “It cannot be done for a few months at the discretion of oil companies, but through clear rules.” Daniel Abad, the provincial minister of economy for Tucumán, noted that the provinces of Tucumán, Jujuy, Salta, along with Córdoba and Entre Ríos, have reached an agreement. The challenge lies in securing investment, but there is confidence that the law will eventually be enacted once approved. Gobernador Carlos Sadir of Jujuy highlighted the importance of transparency in pricing and market operation within the new law. He stressed that this legislation is crucial for the future of the region, aiming to boost development, employment, and support for local sugar mills. According to Sadir, the industry requires a new regulatory framework and must fight for the best possible regulations for all stakeholders. Current production capacity for bioethanol stands at approximately 1.45 million cubic meters per year, while annual demand in Argentina is around 1.2 million cubic meters, leaving a surplus capacity of 25%. Increasing the ethanol blend could reduce the importation of gasoline, which reached $500 million in 2025. The new regulatory framework introduces changes compared to current legislation. For biodiesel, produced mainly from soybean oil, the mandatory blend will increase from 7.5% to 10% after 12 months following the law's enactment. Regarding bioethanol for gasoline blending, the requirement will rise from 12% to 15%. The origin composition will maintain the division of 6% from corn and 6% from sugar cane, while the remaining 3% will not be subject to regulation regarding its raw material source.