Top Trends in 7 Key Latin America Hotspots

by Jim Lane (Biofuels Digest) In a striking pledge made in the latter part of 2016. 20 Latin American countries promised to promote biofuel production and use, with the support of development finance institutions.

That was then, this is now. What’s happening towards the development of domestic biofuels and chemicals in Latin America, and the development of market programs to utilize the fuels? Well, not all that much. There’s been innovation in Brazil a-plenty — on the renewable chemicals, cellulosic ethanol fronts and even in first-gen ethanol production.

Elsewhere, it’s mostly been about exports and imports and market programs, and less about deploying technology and building new plants. The US has been shipping ethanol wherever it can, and trying to fend off low cost imports of biodiesel, and those efforts (backed with pep by the new Trump Administration) have had impact across the region.

Here are the Top Trends in the 7 Key Markets as we have seen them from the Digest’s reporting.

Brazil

Policy. In December, we reported that Brazilian policy took a step forward when the Senate passed the long-awaited RenovaBio policy, (see update) ... A lot of the details are yet to be filled in including blending mandates that are expected to be significantly higher for both ethanol and biodiesel.

New technology, In July we reported that Raizen plans to scale up its cellulosic ethanol technology five-fold over the next two years to 40 million liters by 2018, a move that will make the fuel competitive with conventional ethanol.

Renewable chemicals. In November, we reported that Braskem and Haldor Topsoe have signed a technological cooperation agreement to develop a pioneering route to produce monoethylene glycol (MEG) from sugar. The agreement calls for the construction of a demonstration plant in Denmark, with operation slated to begin in 2019.

Argentina

Taxes. In December, we reported that biodiesel exports will face an 8% tax beginning next year in an effort to keep more of the fuel home and bring it into balance with the 27% export tax already lobbed on soy oil. Argentine biodiesel exporters received relief earlier this year when the EU opened back up its market by lowered the import duty while the US went the opposite direction by tacking on an even higher import duty than the Europeans originally had.

Domestic markets. In January, we reported that the Argentine department of agriculture is developing a policy that would allow farmers to use their own biodiesel production on-farm to help reduce their operating costs for farm machinery. By some estimates, the move could save the agricultural industry $377 million every year thanks to biodiesel running at about 60% of the cost of fossil diesel. Every season, farmers use about 2.4 billion liters of diesel, 30% of which could be replaced by biodiesel.

Colombia

Mandates. In May, we reported that the country is looking to boost its ethanol-blending mandate to 10% by year’s end ...

Chile

Waste to fuels. In October, we reported that the city of Concepción has launched a used cooking oil collection program to complement the UCO collection from restaurants last year in an effort to boost biodiesel production.

Ecuador

E5 launch. In April, we reported that state-owned Petroecuador signed a $95 million offtake agreement for anhydrous ethanol from domestic producers Consorcio Artesanal Cado, Producargo S.A., Codana S.A. y Soderal S.A for the commercial roll out of the Ecopaís retail fuel to be marketed in eight provinces. The fuel is a 5% ethanol blend with gasoline launched in 2010 at 19 gas stations that is now sold in 372 gas stations.

Uruguay

New cash-crop for farmers. In May, we reported that Agrisoma Biosciences and Uruguay inked a partnership aimed at introducing a new, renewable, low carbon cash-crop for farmers. The deal gives the Quebec-based company the opportunity to grow its business outside of Canada by planting thousands of new hectares of the Carinata seed in Uruguay. Under this new deal, both parties anticipate significant economic and rural benefits from production of Carinata in Uruguay as a non-food crop that can be made into low carbon bio and aviation fuels as well as nutritious, GMO-free animal feed.

The biogas option. In February, we reported that Brazilian researchers are expected to arrive in the capital of Montevideo on Thursday after a 532-mile drive from the Brazilian city of Montenegro in a vehicle powered entirely by biogas. The trial is meant to promote interest in the use of the fuel that the Uruguayan energy ministry hopes could be an option for adding value to agricultural waste, especially livestock. Use of biogas in agricultural equipment is seen as a major opportunity for the sector as well.

Uruguay is one of the world’s largest biofuel consumers, in part thanks to the agro-fuels laws which require a 6% mix of biodiesel in gasoil and 9-10% of bioethanol in gasoline, according to BN Americas.

Mexico

E10 ruled in. In June we reported that E10 was in as the Mexican Energy Regulatory Commission said it would increase the maximum amount of ethanol that can be blended in Mexican gas supplies from 5.8 percent to 10 percent, except in the cities of Monterrey, Guadalajara and Mexico City. The announcement modified the Mexican Official Standard NOM 016-CRE-2016 regarding the quality specifications for fuels by increasing the maximum volume content of anhydrous ethanol as an oxygenate in regular and premium gasolines in Mexico.

E10 impact on MTBE demand, IN October, we reported that the US MTBE industry is worried about the impact of Mexico potentially blending 10% ethanol from a previous cap of 5.8%. The $1 billion industry exports more than half of its production to Mexico but if the recently announced—and recently court-suspended—policy goes through, demand for oxygenates like MTBE will reduce significantly. READ MORE