Argentina stimulates ethanol use in fuel

Planning Minister Julio De Vido, announcing the measure, said: “This measure
will lead to greater production of energy, a more diverse energy supply network,
and a larger supply of fuel.”

A 2007 law already required Argentines to
use a 5% fuel mix of either biodiesel or ethanol starting in 2010. De Vido’s
announcement shifts the law in favour of sugar-based ethanol.

De Vido
said the move is part of a national biofuels promotion program aimed at boosting
the production and use of clean and renewable energy.

The planning
minister said as part of this program companies will invest more than $500
million in northern sugar-producing provinces.

De Vido said Argentina
will initially produce 300 million litres of ethanol annually but that will rise
to more than 600 million a year.

This will be more than enough to surpass
new demand for the fuel, De Vido said. “The use of ethanol will be obligatory,”
he said, adding that the percentage mix requirement could rise in line with
production.

De Vido said a new pricing system “will guarantee sugar
producers a permanent and reasonable profit.” He also said tax incentives will
be granted to companies that invest in the sector.