Argentina announces plan to boost mandatory ethanol blend to 12%

Argentina announced that it was increasing the mandatory ethanol blend in gasoline from 10% to 12%.

The incremental ethanol volume would exclusively come from sugar cane and is an attempt to boost sugar cane farmers’ income at a time when there’s a slump in sugar cane prices, according to Argentinian President Mauricio Macri during a news conference in Tucuman, Argentina’s main-sugar producing region.

Ethanol production in Argentina is about 800,000 cubic meters, of which 59% is corn-based and 41% sugar cane-based, according to Claudio Molina, head of the Argentine Biofuels Association. He said the announcement will mean some 160,000 cubic meters more of ethanol will be needed, adding, “So this is a very positive outcome for the whole sugar cane value chain.”

The effectivity date of the higher ethanol blend would be either March or April. Ultimately, the aim is to raise the ethanol blend to 15%, he said. Argentina introduced 5% ethanol blend in 2010, then raised the blend to 6% in 2013, 8.5% in September 2014 and 10% in December 2014.

While Argentina is a small sugar cane producer on a global scale, it is the world’s fourth largest corn producer and second in exports.