Argentina's biodiesel exports have risen sharply since May, thanks to a cut in sales taxes that should allow the country to double its international shipments this year from 2013, the head of the local industry chamber said. Shipments from Argentina had fallen off sharply since 2012 when the European Union, its No 1 customer, accused the country of unfair trade practices and raised tariffs.
Under pressure to jumpstart activity in the sector, the government cut biodiesel export taxes to 11 percent from 21 percent in May. Now the South American grains powerhouse is on track to double exports of the fuel this year to 1.4 million tonnes versus 700,000 tonnes in 2013, said Luis Zubizarreta, president of Carbio, the chamber of biodiesel producers and exporters.
"In the first four months of this year exports remained very low. Then the tax cut allowed us to become internationally competitive again and we've been able ship a good amount of our product," Zubizarreta said in an interview earlier this week. Carbio expects Argentina to produce 2.35 million tonnes of biodiesel this year, well above the 1.8 million tonnes projected by the chamber at the start of the year. "We are still not at 100 percent capacity," Zubizarreta said, "but the industry has started functioning well again."
Argentina is the world's No 3 exporter of soybeans, from which biodiesel is made. The country is the No 1 supplier of soyoil and soymeal livestock feed. In November of last year, the EU set anti-dumping duties on biodiesel at an average of 24.6 percent for Argentina and imposed similar tariffs on Indonesian biodiesel. Argentina was previously the world's top biodiesel exporter, shipping a record high 1.7 million tonnes of the fuel in 2011, before shipments plunged the next year due to the EU tariffs.
Argentina has complained to the World Trade Organisation over the European measures, accusing the EU of protectionism. Back home the outlook has been clouded, according to Zubizarreta, because of a recent creep-back in export taxes. "After the tax cut there have been some upward adjustments to about 17 percent today, so the numbers are not as good as they were in May," Zubizarreta said.
Although Argentina's differences with Europe have not been settled, Europe remains a major buyer of Argentine biodiesel. EU countries are taking the fuel and mixing it with regular diesel to sell to other importers, Zubizarreta said. "The shipments are going to tax-free zones in Europe where traders blend our biodiesel with gasoil," he added. "It does not enter the EU. It goes to other destinations like Africa and the Far East."
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