The Senate approved the biofuels reform and the sector projects investments of USD 1 billion

The National Senate gave half approval to the new regulatory framework for biofuels, an initiative promoted by La Libertad Avanza that obtained 41 affirmative votes and 25 negative votes and will now be addressed by the Chamber of Deputies. The project modifies the current regime and proposes a scheme with higher mandatory blends, new competition conditions, and a long-term regulatory horizon.

One of the main changes will be the increase in the mandatory biodiesel blend in diesel, which will rise from 7.5% to 10%, while the bioethanol used in gasoline will increase from 12% to 15%. The initiative also incorporates a bidding system through a single, transparent, and publicly accessible market for price formation.

In the case of bioethanol, the new scheme contemplates a 6% participation for that produced from sugarcane, another 6% for that made from corn, and an additional 3% subject to competition. The reform thus aims to increase the demand for national raw materials and enhance value addition in the main producing provinces.

The project progressively enables greater participation of integrated companies and establishes a transition for non-integrated plants, which currently concentrate a significant portion of the domestic market supply. When the blend reaches 10%, SMEs will retain a 6.5% share, while the remaining 3.5% will fall within a free negotiation segment.

From the agro-industrial sector, they highlighted the progress of the project and stated that its final approval could mobilize private investments exceeding USD 1 billion. According to estimates released by the Argentine Agroindustrial Council, these disbursements would be aimed at expanding installed capacity, incorporating technology, improving logistics infrastructure, and developing new energy sources.

The entity also stated that the new framework could generate direct and indirect jobs and favor the substitution of fossil fuel imports. In parallel, the Chamber of Oilseed Industry valued the increase in mandatory blends and the scheme of greater competition provided by the reform.

The project also expands the universe of fuels covered by the regulation and incorporates biogas, biomethane, renewable diesel, sustainable aviation fuels, and other second-generation developments.

After the approval in the Senate, the initiative is now in the hands of Deputies. If it obtains final approval, the new regime will begin to gradually modify the structure of the biofuels market starting in 2027.