Since 2010, when the Biofuels Law was regulated, gasoline in Argentina is mixed with a part of bioethanol, which is obtained from both sugar cane and corn. Today this mandatory cut of biofuel in gasoline is 12%, although when there is availability and prices are convenient for refiners, the proportion rises a bit, while it is usually not reached in the opposite situation.
But in 2022 the consumption of gasoline in the country grew more than double the GDP, and dragged down its “bio” component, which had record production. According to Claudio Molina, executive director of the Argentine Biofuels and Hydrogen Association, “naphtha sales in 2022 reached 9,919,000 m3which represented 13.6% more than in 2021″. And the bioethanol content practically covered what was stipulated by law: it was in the order of 11.6% on average, according to the specialist.
A historical corn ethanol production
According to a report from the Department of Economic Studies of the Rosario Stock Exchange (BCR), in order to cut the volume of gasoline consumption that approached the maximum levels of 2017, a volume of bioethanol of around 1. 17 million m3. “The impact of the drought on sugarcane production meant that the greatest demand had to be supplied with corn bioethanol”indicated the organization.
Thus, the production of bioethanol “showed growth close to 16% year-on-year in 2022”: while that of bioethanol from corn doubled, 32%, and “reached its maximum historical production”, while that of bioethanol from sugarcane “remained relatively stable compared to 2021”.
Export of bioethanol in naphtha tanks
For Molina, “the explosion in the intertemporal consumption of naphtha is striking”, against a GDP that grew 5.9%, according to INDEC. Since gasoline is a fuel more associated with individuals and families, “There is a large increase in leisure outings, as well as the progressive abandonment of the home office and greater use of the carto the detriment of public transport, sequel of the pandemic”.
On the other hand, the expert also points out that “a part of the registered increase is given by the sharp increase in demand for naphtha from neighboring countriesdue to the low internal prices of this product, in relative terms”.
Bioethanol production set a record in 2022, after the high demand for naphtha.
In fact, the provinces that increased their gasoline sales the most are the neighboring ones. Due to local price regulation, territories such as Formosa, Misiones and Corrientes had record sales for several months due to the number of vehicles from neighboring countries that came to load and even to carry fuel drums at less than half the price of their countries. From this perspective, and although it is very difficult to quantify, it could be said that in 2022 Argentina exported bioethanol in naphtha tanks.
The differences with respect to Brazil and the United States
Despite the good news, the production of bioethanol from corn in Argentina lags far behind that of the other major world producers of this grain, the United States and Brazil, which Together they produce 80% of the world’s ethanol.
The United States, which makes ethanol basically with corn, last year would have produced close to 60 million m3 of this biofuel, “half the world’s ethanol”; It has 192 plants in total, most of them close to corn growing areas such as Iowa, Nebraska, Minnesota, Illinois and Indiana, according to the BCR.
“Although the mandate to cut gasoline with ethanol in the United States is established at 10% (E10), there is a range of complementary policies at the federal level and in the states for the promotion of US ethanol, which leads to effective cuts The most common are between 20% and 30% ethanol, according to the United States Department of Energy”. As infrastructure, the country has “more than 4,200 service stations that provide and more than 20 million flexible vehicles that can load up to E85 gasoline, that is, with 85% ethanol and 15% naphtha.”
As for Brazil, which mainly produces ethanol from sugarcane and has been growing rapidly in corn, “it allows a mandatory cut of between 18% and 27%” although in practice it is closer to the latter; it has 18 floors and “the largest fleet of flexible vehicles in the world, with more than 30 million unitswhich can use ethanol up to E100 (that is, with a cutoff of 100%) in the cases of hydrated ethanol”.
Corn: much more to go in added value
The benefits of bioethanol that experts review are multiple: mainly, it allows adding value at source to the production of agricultural commodities, reducing greenhouse gas emissions, generating foreign exchange for exports, and saving foreign currency on gasoline imports.
Despite the production record of 2022, the import of gasoline in Argentina was also a record last yearwith 1.16 million m3, according to Molina. At the same time, the BCR shows that the country used 3.7% of its corn production for ethanol, against 9.3% in Brazil and 35.3% in the United States.
The United States and Brazil currently produce 80% of the global ethanol.
For Fernando Vilella, director of the Bioeconomy Program of the Faculty of Agronomy of the UBA, who will preside over the annual congress of the Maizar chain this year, the increase in the production of corn bioethanol that occurred in 2022 is positive, but there is a lot more to go in this line. “With corn ethanol from one crop, using cars with flex engines, we could not use gasoline in Argentina, and also double a good part of the production of animal protein”, he maintains, “since the ethanol is obtained from the starch of the grain and a product remains, the burlanda, very good for bovines. It is also enough to double the production of chickens and pork with the rest of the grains.”
