ARGENTINA: Sugarcane industry defends increase of ethanol in gasoline mix

Published: 04/20/2017, 4:28:57 PM

Argentina's ethanol industry, heavily concentrated in the country's northwestern provinces, proposed to the national government an increase from 12% to 15% in the mandatory percentage of ethanol in gasoline, according to Argentina's El Cronista news website.

The ethanol sector in Argentina invested US$1.15 billion to expand production capacity in 2016.

Oscar Rojo, president of the Chamber of Alcohol and director at San Martín del Tabacal mill, confirmed that representatives of the sector told president Mauricio Macri during a meeting that this increase in the rate of ethanol in gasoline can be applied immediately, "giving a tremendous boost to our activity."

Rojo said the sugarcane sector includes 20 sugar mills and 14 distilleries.

"After several years of poor economic performance, due to low prices in the foreign market, we turned a lot of our sugar production capacity into ethanol in the local market, which helped to strongly improve the equation," he said.

The federal government increased the mandatory percentage on ethanol in gasoline from 10% to 12% in April 2016. Those two additional percentage points were reserved only to ethanol made from sugarcane, and not corn ethanol.

"This allowed us to install four new plants and to expand production areas, which means a lot of potential for growth," Rojo said, adding that ethanol production rose from 455,000 tonnes in 2015 to 570,000 tonnes last year.

Rojo said the industry is able to supply ethanol even if the government increases the mandatory percentage to 17% in the mix, "but we propose to reach 15% based on tests carried out on motor vehicles that showed that this increase is feasible."