Argentina hikes ethanol blending rate in gasoline
2/8/2016 12:00:00 AM
By Maximiliano Rizzi
BUENOS AIRES (Reuters) -- Argentine officials said Friday that they are increasing the required blend of ethanol in gasoline to 12% from the current 10%, a change that will boost the South American country's production of the biofuel by 20%.
The additional ethanol would be exclusively derived from sugar, President Mauricio Macri said at a news conference in Tucuman, Argentina's main-sugar producing region.
The increase should be a boon to farmers there struggling with a slump in global sugar prices since 2010 due to oversupply.
"This announcement that the blend of ethanol in gasoline will rise to 12% from 10% guarantees the growth of the region," Macri said.
Argentina, an agricultural powerhouse, produces all the ethanol it uses.
Ethanol production is about 800,000 cubic meters, of which 59% is corn-based and 41% is cane-based, said the head of the Argentine Biofuels Association, Claudio Molina.
"This will mean some 160,000 cubic meters more of ethanol are needed, at a moment when sugar prices are very low," Molina said. "So this is a very positive outcome for the whole sugarcane value chain."
Molina specified the ethanol would be produced in Argentina and said the measure would likely become effective from March or April. The ultimate aim was to raise the required blend of ethanol in gasoline to 15%, he said.
Argentina first demanded ethanol be mixed with gasoline at a 5% ratio in 2010.
(Additional reporting and writing by Sarah Marsh; Editing by G Crosse and Leslie Adler)
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