Argentina's biofuel policy debate shapes health, environment and jobs

Argentina is re‑examining its biofuel policy under Law 27.640, passed in 2021 after the expiration of Law 26.093. The law sets a mandatory biodiesel blend of 7.5% for diesel, though actual content has hovered around 6% and dipped below 4% at times in 2023. For bioethanol, a 12% blend is required, split equally between sugar‑cane and corn ethanol, with compensations when one sector cannot meet demand.

The sector’s development is constrained by strong influence from the oil industry, especially state‑controlled YPF, a phenomenon described as “regulatory capture.” Past initiatives, such as the 1980s Alconafta plan and the 2006 law that introduced mandatory blends, have struggled to reach the country’s full potential. Critics argue that traditional economic analyses ignore health, emission and regional development benefits of biofuels.

Five legislative projects are currently under parliamentary discussion. One, driven by Patricia Bullrich and other senators, mirrors the Energy Ministry’s text; another, supported by Alejandra Vigo, Camau Espínola and Carolina Moisés, was drafted with the Liga Bioenergética de Provincias. Additional proposals involve other political figures. Meanwhile, the United States, Brazil and Paraguay are advancing biofuel schemes that combine environmental and socioeconomic gains, highlighting Argentina’s lag in the sector.