Argentina’s biodiesel production in 2025 is expected to be the lowest volume on record at 1.2bn litres, a drop of 7% compared to the previous year, according to a US Department of Agriculture (USDA) report.
With domestic consumption steady, exports were forecast at a near 20-year low of 340M litres, the 2 September Argentina – Biofuels Annual said.
Soyabean oil remained the primary feedstock and the blending rate was projected at 6.6% – below the 7.5% mandate – while production capacity remained unchanged, operating at over 70% idle.
“The local biofuels sector has been stagnant in the past several years because of laws regulating the sector, official policy or lack thereof, and political/economic decisions,” the USDA said.
Biodiesel mandates had changed (up and down) several times and historically had not been reached, the USDA’s Foreign Agricultural Service (FAS) Global Agricultural Information Network (GAIN) report said.
The only notable biofuel policy development was in November 2024 when the administration submitted a bill to Congress to establish a new regulatory framework for biofuels aimed at promoting sustainability, energy efficiency and greater competition through price deregulation.
The proposal would set a biodiesel blending mandate of 7.5% – with 5% of it reserved for small and medium producers – rising to 10% by 2031 under a fully liberalised market.
However, the bill had not passed through Congress, the USDA said.
In August 2024, Liga Bioenergetica, a group formed by the six provinces which had an important role in biofuel production in the country, had presented a bill focused exclusively on biodiesel and bioethanol.
The bill focused on revamping the biofuel sector, increasing production and use, while reducing petrol and diesel imports and would allow Argentina to advance its environmental and climate change commitments, the USDA said.
The country’s 2006 and 2021 biofuels laws remain contentious, with most small-and-medium-sized biodiesel producers concerned they would open the official mandate to large companies leaving few smaller producers able to compete once the market is fully liberalised in 2031, according to the report.
“Biofuels continue to play only a small role supporting Argentina’s commitment to reduce greenhouse gas emissions by 2030 as the programme stagnated and has not advanced in meaningful ways,” the USDA said.
“At the same time, there are currently no policies in place to advance commercialisation of new biofuels, such as renewable diesel or sustainable aviation fuel.”
Argentina’s biofuels sector receives no direct financial support, relying instead on mandated blending rates, which have been reduced in recent years, particularly for biodiesel, according to the report.
Biodiesel exports remained a main pillar of the local industry but varied significantly year by year based on policies, market dynamics in export destinations and the price of diesel and biodiesel relative to the price of soyabean oil, the USDA said.
The European Union (EU) continues to be the main market for Argentine biodiesel, according to the report.
