“Bioleo is an oil extraction plant located in Bahia state, with capacity to process 130,000 tons of grains of several types of oilseeds. The unit has installed capacity to store 30,000 tons of grain and tankage for 10 million liters of oil,” said Petrobras.

“The control of the company will be shared among Petrobras and the other partners, who remain with a 50% stake in Bioleo. The agreement also provides for investments of BRL6 million for operational and HSE (Health, Safety, and Environment) improvements to be disbursed equally by the partners,” it added.

ShareBy Rogerio Jelmayer

 SOURCE: MARKET WATCH

SAN NICOLAS, Argentina, Aug 27 (Reuters) – An Argentine company opened on Friday the country’s first factory to make biodiesel from algae, hoping to use pond scum as a replacement for soy in making biodiesel as part of a push for renewable energy.

Argentina is the world’s top exporter of soyoil, but using the edible oil to make fuel is controversial because it cuts into food supplies.

Oil extracted from algae is also seen as an attractive alternative to soyoil and other vegetable oils because it does not use land that could be used for food crops and can absorb carbon dioxide from power plants or factories.

The oil-extraction process also produces a protein-rich paste, which is edible.

“We’re not competing with the food supply but generating food, at a low cost and helping the environment because algae grow fast and trap carbon dioxide,” said Jorge Kaloustian, president of Oilfox S.A., the company that owns the plant northeast of Buenos Aires.

The Oilfox plant’s feedstock is currently 90 percent soyoil and 10 percent algae oil, but the company hopes to eventually depend entirely on algae, which can grow in seawater and even contaminated water.

The algae, which is grown in tanks inside greenhouses, produces a green oil in the photosynthesis process. It grows fast and can duplicate its weight several times a day.

“Algae can get a much higher yield per acre than say soybeans,” said John Williams, spokesman for the Algal BioMASS Association, a trade organization that groups companies involved with developing algae biofuels. “It can produce more than 10 times more fuel per acre than soybeans.”

Some researchers say algae-based fuel would be too costly to produce commercially, but plants that use algae oil have sprouted everywhere, from Australia to China as companies bet on growing demand for renewable fuels.

Exxon Mobil Corp (XOM.N: Quote) last year announced a $600 million investment over the next five years to develop biofuel from algae. [ID:nN14161812]

Kaloustian said the new Oilfox biodiesel plant is the first of its kind in Latin America, and that it is cost effective, partly because the electricity it uses is generated from biogas that comes from sewage waste and compost is fed to the algae to encourage growth.

Through a deal with a JP Morgan-owned company, the carbon dioxide emissions that are pumped into the algae greenhouses from a nearby power plant will eventually be sold as bonds in the carbon market, Kaloustian said.

Oilfox has also signed an agreement with YPF (REP.MC: Quote)(YPFD.BA: Quote), the country’s biggest energy firm, to produce 50,000 tonnes of biodiesel per year. Under Argentine law, energy companies will have to blend diesel with 10 percent biodiesel by year’s end. [ID:nN01138775]

“There’s great enthusiasm for producing renewable energy in Argentina because we have the material needed to make the blend which is soyoil,” Kaloustian said. “We made a bet on using soyoil with a bit of algae, but one day, it will all be algae.” (Writing by Luis Andres Henao; Editing by Helen Popper and Eric Beech).

By Luis Andres Henao

Source: Reuters

Both projects will be carried out in the central province of Santa Fe and are due to come online in September 2011, the general manager of Cargill Argentina, Hugo Kranjc, told reporters after submitting the company’s plans to President Cristina Fernandez.

“This shows the company’s confidence in the country’s potential,” Kranjc said.

The power plant will have 18 MW of generating capacity, while the biodiesel facility’s annual production capacity will be 240,000 tons, the Industry Ministry said in a statement.

Both projects will be located next to a Cargill port terminal and 13,000-ton-per-day soy-processing plant in Santa Fe.

“This investment contributes to the diversification of the energy matrix, promotes the purchase of capital goods of national origin and generates value-added and real jobs,” Industry Minister Debora Giorgi said.

Cargill employs 4,000 workers in Argentina in 50 locations and its assets include export terminals, country elevators, malt plants, oilseed crushing plants, beef-processing plants and flour mills.

More than 90 percent of its production is destined for export to markets including China, Spain, Peru, Egypt, Brazil, the Netherlands, India, South Korea, Malaysia and Chile, according to the company.

SOURCE: EFE

The Food and Agricultural Organization of the United Nations (FAO) has recently released a new report that champions jatropha as a promising biodiesel crop especially for global rural farmers. The report, “Jatropha: A Smallholder Bioenergy Crop, the Potential for Pro-Poor Development,” set out to examine the potential for jatropha as a sustainable biodiesel crop and has been in development since 2008.

The authors write, “As developing countries face increasing local demand for energy in rural areas, they also must deal with both economic and environmental pressure on agricultural lands in general. The possibility of growing energy crops such as Jatropha curcas L. has the potential to enable some smallholder farmers, producers and processors to cope with these pressures.”

The report says jatropha is a promising crop in part because it can grow on marginal lands, in drought conditions and animals do not graze on the crop. It also holds the promise of high oil output. The report also notes some of the feedstock’s drawbacks which include the fact that no consistently high yielding varieties have been developed and because the plant is toxic to both humans and animals, it can not be used for livestock feed, a major added value to most biofuel feedstock production.

Jatropha  originated in Central America and is making headway in Africa and parts of Asia for biodiesel development. Experts predict that by 2015, Indonesia will be the largest jatropha producer in Asia, Ghana & Madagascar in Africa and Brazil in Latin America.

While the report ultimately favors the crop, it does caution that depending on how programs are developed, there could be significant environmental damage that would outweigh the positive environmental attributes of biodiesel.

The report does not study the possible future of jatropha in the U.S., although at this time there are a few studies underway. In addition, it is not recognized as a biodiesel feedstock under current Renewable Fuels Legislation (RFS2).Joanna Schroeder – August 4th, 2010.

SOURCE: DOMESTIC FUEL

Skies may be filled with algae.Bilal Bomani and salicornia in the Green Lab at NASA Glenn Research Center  In The Region: Scientists at NASA Glenn Research Center in Cleveland may have tied the future of space exploration to sub-aquatic life. 

When it comes to energy, there’s always something new under the sun.  Except for solar power, which has always been under the sun.  NASA Glenn Researcher Bilal Bomani has been working on a process to use biofuel as an alternative energy source for commercial aviation.

Along with experiments involving everything from clean coal to bacteria, the plant Salicornia has emerged that produces an oil that can be refined into biodiesel.  It’s also robust.

“You know that hurricanes devastated Galveston, Texas.  When we went to Galveston, Texas, there was nothing there.  The oil fields were devastated, but we saw Salicornia all over the place!  It can actually help with the coast line, cause it has nice root structure, and Salicornia has very thick roots.”

Salicornia is also known as Pickleweed or Dwarf Saltwort. It’s flourishing far from the coast — in saltwater and sand tanks at NASA’s wind-turbine powered Green Lab near Cleveland-Hopkins airport.

“This is a green solution.  In order to be considered green you have to satisfy three metrics.  One, be alternative, and clearly this is alternative.  Two, be renewable, this is clearly renewable.  And three, be sustainable, and we have all three here.  That’s why this is called a green lab.  It’s completely sustainable.”

This entire process works without precious resources such as fresh water or arable land.  Even the fertilizer comes from an unlikely source: freshwater mollies, which can be climatized to saltwater in a matter of hours.

“They’re cheap, they love to have babies, and they love to go to the bathroom.  And that’s why we use them.  And so, all we have to do is basically is seed one of the tanks outside with 50 mollies, and now each one has over 300.  And that lab’s been in existence since 2009, November.”

Bomani holds degrees in mathematics and computer science from Cleveland State and Case Western, but his interest in fish led him to NASA.

“In college, I did not have a television, I had a fish tank.  In 2006, there was a meeting of the minds at NASA headquarters in Washington, D.C.  And they said ‘we need to think outside the box; we need to come up with something that’s dealing with saltwater.’  And that’s how they found me.  Actually it was Dr. Bulzan, we had a meeting, he was like ‘well, we’re looking into this, do you think you could do this?’  And I said ‘let me think for a minu- YES, I can do this’.”

As the fish do their thing, the Salicornia grows and eventually produces oil that is shipped to a company in Chicago.  OAP refines the oil into jet fuel, which is sent back to NASA Glenn for combustion testing in a DC-8.  So far, the fuel has all the required characteristics: high freezing temperature, light weight and “carbon neutrality,” which means the entire process of producing the fuel results in lower overall emissions.

David Pimentel of Cornell University, thought this sounded too good to be true.  He’s been skeptical of ethanol and soybean biodiesel for years.  His primary concern is how much labor, fertilizer, water and electricity it takes to make each kilocalorie of fuel?  Depending on how all of those costs are defined, theoretical prices for a gallon of algae-derived fuel range from 19 cents to $52.  And that’s one of the reasons Pimentel was skeptical of algae as well.

But he and fellow Cornell researchers investigated and are authoring a paper on the subject.  In their controlled environment, they were pleasantly surprised at their findings.

“We were getting 1.3 kilocalories per kilocalorie of input that we had in the system.  That’s still way and above ethanol production, better than biodiesel production.”

Pimentel’s group isn’t the only one studying algae biomass jet fuel.  Many of Bomani’s partners are right here in Ohio.

“In this area we do have some collaborators.  Obviously Cleveland State University, we have Toledo, we have OAI, we have Wright Patterson Air Force Base, Univenture, which is in Dayton area, we got Phi Cal which you may have heard of is here.  I would say there is an Ohio initiative.”

The Ohio Initiative, as he calls it, has even signed an agreement on alternative fuels with Governor Ted Strickland.

All of this assumes the greener jet fuel can be made on a scale that meets the country’s needs.

“If we had the land mass of the state of Maryland, and we had our algae and halophytes, we’d have enough fuel for the entire U.S.  It’s not as far off as you think.  We don’t have a lot of time, because by 2013, we need 400,000 gallons of this.”

If a former skeptic like Pimentel can be convinced, Bomani’s goal of 2013 doesn’t seem that far-fetched.

SOURCE: WKSU

The 100 Mgy Imperium Renewables  facility in Grays Harbor, Washington.

Back in 2008 the death watch began on Imperium Renewables.

Though its 100 Mgy multi-feedstock plant in Grays Harbor was, at the time, the largest and most modern biodiesel facility in the US, the company lost its CEO, withdrew a planned IPO, and was forced to cancel a potentially lucrative Hawaiian development project that would have supplied biodiesel to Hawaiian Electric (HECO).

By August 2008, Royal Caribbean had pulled out of an 18 million gallon annual contract and sold off its investment in the plant, and even the city of Seattle canceled a planned biodiesel contract, citing the rising cost of biodiesel fuel.

Company founder John Plaza, late of Seattle Biofuels, stepped back in as CEO as biodiesel plants began to shutter all across the country in the face of static fuel prices, rising feedstock prices (especially for soy), and ultimately the loss (or near-loss) of a precious $1.00 per gallons biodiesel tax credit that had helped subsidize the cost of biodiesel when it began to exceed the cost of diesel.

2008: How Low Could it Go?

As if the conditions for biodiesel weren’t bad enough across the country, the mood in Seattle was perhaps even more sour. Even downstream alternative fuels marketer Propel Biofuels re-established its corporate HQ in California as individual protesters began to surface outside of biodiesel stations, and local eco-publishers like Grist began to run increasingly negative articles about the bio side of the alternative energy movement.

The producers of the “Fields of Fuel” documentary, which won an Audience Award at the Sundance Film Festival, and a standing ovation from the alt-film crowd for its vision of a crop-based solution to global energy woes, hastily re-named itself “FUEL” and took on a more algae-centric view.

The resurrection of a biodiesel giant

“I’m not dead yet,” proclaims a decidedly uncooperative corpse in Monty Python and the Holy Grail, and as with Mark Twain, reports of Imperium’s impending demise were somewhat exaggerated.

Today, what was expected to become one of the first major casualties of the biodiesel crisis of 2008-10 has emerged as one of its leading survivors, and John Plaza, then as now, remains one of the biofuels industries most outspoken and astute observers.

“Relative to the industry this year, we have avoided layoffs, and we’re enjoying our niche market – serving the Canadian marketplace,” Plaza says. “There’s additional demand because of the Low Carbon Fuel Standard in BC. Our customers have come to recognize that we produce the lowest cost, highest carbon reduction fuel.”

As far as prospects in the US, Plaza is sanguine. “There’s been a lengthy delay in any impact from the launch of RFS2. We’re seen more RIN trading than demand for fuel from obligated parties, so far. They are buying RINs from a huge backlog available.”

Nevertheless, Imperium is looking up these days, rather than being hunkered down. “We’re pretty bullish for demand for Imperium’s, We’re not producing on a continuous basis, but we have been producing on monthly campaign basis within 24 hours of receiving oil. At many points we are at or near 100 percent capacity, and for the first quarter we were overall at near half our capacity.”

The tax credit – never say die

“The tax credit still has some legs,” Plaza contends. There’s a discourse this week around the extenders package, and we’ll have one more chance after Labor Day. I’m 55 percent optimistic, 45 pessimistic.”

“But we have to see changes. What the industry needs is a two-fold support, a mnadted floor, and incentives with tax policy to get the outcomes we’re trying for. That’s where a Low Carbon Fuel Standard comes in, with a focus on a reduction in carbon emissions, that would reward the best behavior.”

The ethanol tax situation

“The frustrating part of the debate,” Plaza contends, “is that we’ve been subsidizing corn since I’ve been alive. Ethanol came about because of excess corn. The goals were right – rural development, price stabilization, but the policy drivers were wrong, and gave us this monoculture producing excess cheap food which was primarily used for cheap feed.”

Corn support going away? “Absolutely not, I don;t see them dismantling the whole system. And frankly, if ethanol policy [inadvertently] creates a few rich farmers in the Midwest, so what? I’d much rather have rich farmer than a rich Chavez.”

Sustainability

“The Low Carbon Fuel Standard is the biggest issue,”Plaza comments, “and we need sustainabiliuty criteria, and we need to understand what we are truly measuring against. Wd have to have a frame of reference that looks at the marginal production of fossil fuels, which we obtain from Canadian tar sands, and we need a fair standard based on fair data. The Roundtable on Sustainable Biofuels is developing some baseline assumptions, and will measure the inputs and have it audited. Their approach is to have an average for all of biodiesel, and then if you want to get an individual score for a facility, you can pursue that.”

“The California Air Resources Board (CARB) got it all wrong. It’s a complete and utter disaster, with utopian requirements to meet standards that will just kill off first generation fuels in California and you never get to the second generation.”

[Editor's note. No new commercial-scale or demonstration-scale advanced biofuels project has been announced in California since the completion of the California Low Carbon Fuel Standard.]

“RSB needs to be taken seriously, by the Europeans, the obligated parties, and needs needs to be valid organization. It does feel at times like middle school kids finding out how to get along, but when the European Biodiesel Board and eBIO pulled out of RSB, it was a petty and foolish move by some petty and foolish guys.”

Biodiesel consolidation

Biodiesel has been undergoing some consolidation in recent months, primarily with REG on the move, acquiring new capacity. Imperium has stayed away.

“There are very few facilities we like – with the large scale, high quality, and logistics similar to what we have. For us, consolidation is not best strategy for our shareholders. Our focus has always been on innovation and market opportunity, based on most efficient and highest value. We try to be differentiated enough to be biodiesel 1.5, with, for example, our emphasis on a multi-feedstock approach.”

Imperium’s own expansion plans

In the Digest, we have been extensively covering in recent months the opportunities for expansion based on existing first-generation capacity in the ethanol side of the market, with a special reports on biobutanol as well as covering cellulosic biofuels bolt-on capacity such as POET is building in Emmetsburg, IA with Project LIBERTY.

What’s opportunities are there for similar expansion, using the existing capacity of biodiesel facilities, their feedstocks acquisition logistics, rail lines, storage facilities, and industry knowledge?

“We like drop-in replacement fuels,” says Plaza, “that use our existing feedstock and agricultural waste. We see real opportunities with hydrocarbon replacement in the distillate markets, and we are focused on what we see as tremenodus opportunities with aviation and military markets. It’s so much about feedstock, and we feel that we have the existing ag wastes, and forest resources, and we have the knowledge in how to efficiently invest in technology.

“We’ve been doing more working than talking, but what we’re working on is a next generation, integrated biorefinery that makes 12 products, inclusive of jet fuel and high value chemicals. [At Grays Harbor], we’ve got the state of art biofuel facility, plenty of land around it. We’re focus on building right at home for now. We like that market.”

SOURCE: BIOFUELS DIGEST

Although biofuels currently supply just one percent of all energy to the domestic market, according to St. James, legislation will require them to provide eight percent by 2016. In addition, the government recently upped the blend of biodiesel with regular diesel from five percent to seven, an important move in a world increasingly reluctant to be fossil fuel-dependent.

The fifth-largest biofuel provider in the world after Germany, the US, France and Brazil, Argentina has two main sources: biodiesel and bioethanol. Sugarcane, grown in the north of Argentina, is the feedstock for the nine companies which produce ethanol in Argentina, while soy oil is the basis for the country’s 19 biodiesel-producing firms, excluding one which converts used cooking oil into the finished product.

Indeed, one enterprising pig farm in Buenos Aires province lucratively converts pig manure into biogas in order to self-power.

Overfeeding. “At the moment, Argentina has more feedstock than it knows what to do with,” St. James told the Herald. “The Chinese aren’t buying our soy oil any more, and so we suddenly have a glut which isn’t finding its overseas market, plus (Planning Minister) De Vido is finding a good application for that extra soy oil. That also means we no longer have to import diesel fuel from Venezuela which is particularly toxic and high in sulphur — so we’re producing our own biodiesel fuel which is cleaner, biodegradable and keeps the money in the country. There’s a lot of upside and very little downside.”

Biodiesel has progressed more than ethanol in terms of quantity produced and margins made, converting 2.6 million tons a year into US$2.1 billion — although 65 percent is exported, mostly to Europe, which has a surplus of biofuel plants but not enough feedstock.

Up to seven. Following a resolution to Law 26,093 in March this year, oil companies now mix diesel fuel with five percent of biodiesel (B5), which obviously led to an increase in demand to the domestic market.

But on June 30, President Cristina Fernández de Kirchner instructed her Energy Secretary Daniel Cameron to hike that blend up to seven percent (B7) next month, with the intention of eventually reaching 10 percent (B10).

“Biodiesel really is Argentina’s shining star,” added St.James. “The aim is to reach B10 levels by year-end.

That really is a big deal and would make Argentina the country with the highest biodiesel mandate in the world by a long shot, if it isn’t already with the B7 resolution.”

Although Planning Minister Julio De Vido last week said: “The State’s objective is to up this to 10 percent by the end of 2010,” Claudio A. Molina, executive director of the Argentine Association of Biofuels and Hydrogen, didn’t think this is likely to happen. He told the Herald: “B7 will come into play this August but I’m not sure if B10 will commence by year-end. After all, the B5 mix was supposed to start in January but it didn’t begin until March.”

And following last week’s green light with regards to the construction of three renewable energy plants to bring the total to 22, which will provide a total of 895 megawatts (MW), 110.4MW will eventually come from biofuels — no mean feat for an industry which only came into existence in May 2006 thanks to the Argentine Biofuels Law 26,093.

However, 500MW will come from wind farms, which is set to become the country’s second-largest renewable energy source, said St. James. “One of the unexpected winners from that deal was thermal energy — good old-fashioned generators that will work on biofuel which have fewer greenhouse emissions instead of diesel fuel.”

Back in 2008, this fledgling market saw US$12 billion of investments in Latin America, according to the AREC, although US$10 billion — went to Brazil’s ethanol plants.

“The other four countries that rank above Argentina all have access to financing, venture capital and legislation,” said St. James. “Here in Argentina we have none of that, but we still rank fifth in the world in terms of production. Just imagine what we could do if we did have access to financing and banks!”

Bean plant. Argentina’s biofuels industry received a further boost last week when local biodiesel producer Renova confirmed it is to invest US$350 million in a new plant located in Timbúes, Santa Fe province, which will process soya beans.

To add icing on the cake, EADS, Airbus’ owner and Europe’s main plane builder, undertook a test flight using a 100 percent microalgae-based biofuel made by Argentina’s Biocombustibles del Chubut.

A first for biofuels, a Diamond DA42 took off from the Berlin ILA air show last month, and was a flight two years in the planning, according to Marcelo Machín, president of the Chubut-based producer.

An important development in an environment increasingly hostile towards fossil fuels, algae can be produced in sufficiently large quantities without competing with food production for fertile land or potable water. St. James said: “A global race is on to find the right strain of microalgae which produce a lot of oil. Biofuels need a vegetable oil to be produced and if you squish seaweed, plenty of algae oil comes out.

“But the challenge is how to grow it quickly. Seaweed needs carbon dioxide and sun so it would grow perfectly next to an old, contaminating cement plant. These little gunky critters double in size in 24 hours, which is why it has caused so much excitement — you have an instant and tremendous feedstock.”

And Dr. Jean Botti, chief technical officer at EADS, added: “This opens up the feasibility of carbon-neutral flights. Third-generation biofuels are more than just a replacement for fossil petroleum — they push the possibilities of future propulsion.”

The Puerto Madryn-based factory is set to receive a sister plant in Sao Paulo which would produce and refine microalgae oil and EADS is hoping to attract 20 million euros worth of investment for it.

While former vice-chancellor Fernando Petrella says Argentina is ripe for investing in terms of biofuels, he is uncertain as to why Sao Paulo is the location for the new plant.

“Given that we are one of the world’s largest suppliers of green energies, this could be an integration point for Argentina to regain its position in the world and the G20. But it’s surprising to me why Biocombustibles del Chubut has chosen Sao Paulo over Argentina. People want to know more about this,” he said to the Herald.

Despite his uncertainty, the former vice-chancellor pointed to the investment opportunities in Argentina.

“In spite of the problems this marvellous country has had — and there are three in my opinion, World War II, the Malvinas conflict and the 2001 crash  — it is still able to do biofuel business which was to the tune of US$2.1 billion last year.”

St. James added: “This really is a moving industry. Last year Argentina produced and exported 1.2 million tons of biodiesel at a cost of a little under US$1,000 per ton. That makes it a billion-dollar industry.

Argentina is always on the brink of an energy crisis. But now that the government is finally understanding the opportunities the biofuels industry is offering, those days may be over.”

SOURCE: BUENOS AIRES HERALD

Earlier this year, EPA announced the final rule for the new Renewable Fuel Standard (RFS2), but the canola pathway was not yet looked at as biofuel feedstock able to meet required greenhouse gas reduction standards. Now, Biodiesel Magazine reports that the EPA says canola oil biodiesel could reduce GHGs by 50 percent compared to petroleum-based diesel:

“These results, if finalized, would justify authorizing the generation of biomass-based diesel RINs for fuel produced by the canola oil biodiesel pathway modeled, assuming that the fuel meets the other definitional criteria for renewable fuel (e.g., produced from renewable biomass, and used to reduce or replace transportation fuel) specified in EISA,” EPA said in the NODA memo.

EPA analyzed canola oil as a feedstock “assuming the same biodiesel production facility designs and conversion efficiencies as modeled for biodiesel produced from soybean oil.” To assess the impact of producing biodiesel from canola oil, the EPA also created a control case projection estimating 200 million gallons of canola-based biodiesel per year by 2022. “While we recognize that some canola oil has historically been used to make biodiesel for domestic use,” EPA said, “this range of production (zero to 200 million gallons) covers the range of production likely by 2022.” To create the projection, the EPA used a number of factors including historical volumes, potential feedstock availability and competitive uses, potential increases in crop acreage and potential increases in crop and conversion yields.

“As with other EPA analyses of fuel pathways with a significant land use impact, the proposed analysis for canola oil biodiesel includes a best estimate as well as a range of possible lifecycle greenhouse gas emission results based on formal uncertainty analysis conducted by the agency,” EPA also noted.

The EPA believes canola crop yields will increase in the long term.

John Davis

Source: domestic fuel

The grain-processing plant will be located just north of Rosario, the main agro-industrial hub in Argentina, which is the world’s largest supplier of soymeal and soyoil.

The plant will have “the capacity to generate its own energy and a port for exports of beans and their derivatives,” Molinos (MOL.BA) said in a statement sent to the Buenos Aires Stock Exchange.

The biodiesel producer Renova, in which the three firms have an equal stake, will build the plant.

Molinos, one of Argentina’s main agricultural and food firms, is controlled by local businessman Gregorio Perez Companc. Oleaginosa Moreno Hermanos is indirectly owned by commodities trader Glencore [GLEN.UL]. (Reporting by Jorge Otaola; writing by Alexandra Ulmer; editing by Jim Marshall).

SOURCE: REUTERS

The fuel-mix requirement will be raised from 5 percent now to 7 percent initially and to 10 percent by year’s end, Planning Minister Julio De Vido said.

Argentina is the main global exporter of soyoil and some analysts say that greater local demand for biodiesel could eventually reduce shipments abroad.

This week we’ll publish a resolution to bring it (the fuel-mix requirement) up to 7 percent and the same resolution will include the strategic objective of reaching 10 percent by the end of 2010,” De Vido told state television.

“This gives us a chance to reduce dependence on soyoil exports and permits us to use this oil to expand Argentine fuel reserves,” he added.

Argentina’s soyoil shipments have been clouded by a two-month-old trade dispute with top buyer China, which blocked Argentine imports in retaliation for the South American country’s restrictions on Chinese manufactured goods.

Argentina is the fourth-biggest global biodiesel producer, with a production capacity of 2.5 million tonnes per year.

The current 5 percent biodiesel fuel-mix requirement, mandated by a law that came into force earlier this year, represents production of around 800,000 tonnes, according to the Carbio biofuels chamber, which groups larger producers.

The group has estimated this year’s biodiesel exports could exceed the 1.15 million tonnes shipped last year. (Reporting by Nicolas Misculin; Writing by Alexandra Ulmer; Editing by David Gregorio)

SOURCE: REUTERS