Argentina Weighs Higher Ethanol, Biodiesel Mandates as SAF Gains Traction

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August 24, 2026

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by Samyak Pandey (S&P Global) (Argentine) Senate reviews bills boosting blend levels; Ethanol output hits 1.35 billion liters; Biodiesel exports drop to 2007 lows

Argentina is considering its most significant biofuels policy overhaul in years, with lawmakers debating legislation that would increase ethanol and biodiesel blending mandates while formally opening the door to sustainable aviation fuel and renewable diesel markets.

According to the US Foreign Agricultural Service report released Aug. 20, the Argentine Senate is reviewing multiple biofuels bills that would replace the current Biofuels Law 27,640 and reshape the country's domestic biofuel market.

The proposed reforms would raise the national ethanol mandate from 12% to 15 % and increase the biodiesel blending requirement from 7.5% to 10%, while gradually liberalizing parts of the domestic market.

The legislation would also explicitly authorize the commercialization of sustainable aviation fuel, renewable diesel (HDRD), hydrogen and biomethane, marking the first time advanced biofuels have been formally incorporated into Argentina's biofuels framework.

"The reform is the first national proposal to give SAF and renewable diesel an explicit legal status inside Argentina's biofuels framework," the report said.

Ethanol demand rises

The debate comes as Argentina's ethanol sector continues to expand.

Fuel ethanol production is forecast to reach a record 1.35 billion liters in 2026, driven by rising domestic demand, new corn ethanol capacity and regulatory changes that now permit voluntary gasoline blends of up to 15% above the country's mandatory blending requirement.

In March, Secretariat of Energy Resolution 79/2026 increased the maximum oxygen content allowed in gasoline and formally authorized distributors to market gasoline containing up to 15 % ethanol through freely negotiated agreements. The mandatory blend remains 12%.

Corn ethanol is expected to account for approximately 60% of total production, with sugarcane ethanol supplying the remainder. Strong domestic consumption is expected to reduce export availability.

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Biodiesel production is forecast at nearly 1.2 billion liters in 2026, up about 8% year over year as domestic blending requirements support consumption. However, exports are expected to fall to their lowest level since 2007 as local demand absorbs more production and overseas market access remains constrained. READ MORE

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Excerpt from AgroEmpresario: The project to amend the Biofuels Law garnered strong support from the northern provinces and the agricultural sector during the Second Bioethanol Summit held in San Miguel de Tucumán. The initiative, currently under consideration by the Senate, proposes increasing the mandatory bioethanol blend in gasoline from 12% to 15% , with the aim of expanding production, attracting investment, and stimulating regional economies.

he Vice Governor of Tucumán, Miguel Ángel Acevedo, defended the initiative's progress and emphasized the province's productive capacity. "We want to develop, we support the cut, we want to go from 12% to 15%, but for that, investment is needed ," he stated.

Acevedo also emphasized the importance of ensuring predictability so that companies can expand their plants. "For that investment to happen, we need legal certainty ," he stated.

From Jujuy, Governor Carlos Sadir agreed on the need to update the regulations. "For us, bioethanol, in particular, means economic development and social development ," he stated.

The governor of Jujuy also stated that the discussion must include how the market will function, price formation, and the conditions of competition. "We have to fight for the best regulations that benefit the entire region, the entire league, but obviously also keeping in mind our business owners and workers, because their future is also at stake ," he maintained.

The Minister of Economy of Tucumán, Daniel Abad, highlighted that the project that reached the Senate is the product of a dialogue process between different provinces and sectors of the biofuels chain.

"It is the culmination of a consensus project that is currently in the Senate and that we understand will be addressed soon ," he stated.

One of the main objectives of the proposal is that the increased processing volume will translate into greater industrial capacity and new investments . The discussion also includes changes to market operations, marketing mechanisms, and greater predictability for producers.

Senator Beatriz Ávila, representing Tucumán, even proposed a target higher than 15%. Her initiative suggests raising the bioethanol blend to 18% , while most of the bills being considered in Congress aim for 15%.

"The important thing is that we can debate and increase it. In Brazil, they don't talk about whether or not the cutoff can be increased. In Brazil (with a 25% cutoff), they talk about how much they are going to increase it ," Ávila stated.

The Brazilian experience serves as a benchmark for the Argentine sector. The expansion of bioethanol in that country has allowed for the development of a production chain linked to agriculture, industry, and transportation.

In Argentina, the potential is concentrated mainly in the sugarcane and corn producing regions . Increased harvesting would allow for greater domestic demand for these raw materials and promote value-added processing at the source.

The legislative debate also reveals differences regarding the degree of market openness. Senator Flavia Royón from Salta warned of the need to protect domestic production against potential imports.

"The price factor cannot be the only variable to determine market opening ," he stated.

Royón also proposed expanding the concept of the regulations towards a bioenergy regime , which includes bioethanol, biodiesel, biogas, biomass and sustainable aviation fuels.

Another point of discussion is the future of biodiesel. Differences between the various sectors could hinder the passage of a comprehensive law. Therefore, the government has raised the possibility of an alternative that would allow progress specifically on bioethanol.

Congressman Andrés Leone was explicit about that possibility: "Yes, there has to be one because one biofuel cannot hinder the development of the other . "

The meeting brought together national and provincial officials, legislators, and industry representatives, who agreed on the need for a stable, long-term regulatory framework . According to Ámbito, the bill promoted by Senator Patricia Bullrich is one of seven currently under parliamentary review.

For the producing provinces, the increased harvest represents an opportunity to expand the installed capacity of sugar mills and distilleries, generate employment, and add value to the production of sugar cane and corn . READ MORE