Argentina biodiesel producers fear losing access to U.S. market

By Maximilian Heath

Nov 22 Argentina’s biodiesel
producers fear losing access to the United States, the
destination of nearly all their exports, after Donald Trump’s
surprise victory in presidential elections earlier this month,
representatives of the sector said.

The Republican candidate, who is skeptical of climate change
and has advocated scrapping or renegotiating trade deals, has
raised alarms in a sector already reeling from a series of
setbacks in international trade in recent years.

Argentina is one of the world’s largest biodiesel exporters,
and is home to processing plants belonging to multinational
producers like Cargill Inc and Bunge Ltd.

“The level of uncertainty is very high,” said Claudio
Molina, executive director of the Argentine Biofuel Association
in a recent emailed statement. He said the sector was worried
Trump might scrap policies meant to reduce the United States’
contribution to climate change, affecting demand for biofuels.

In 2005, the U.S. Environmental Protection Agency (EPA)
implemented a policy requiring a minimum level of renewable
fuels to be blended into transportation fuel.

Trump has said he supports the program, known as the
Renewable Fuel Standard (RFS).

Argentine exports to the United States grew substantially
after 2015, when the EPA made it easier for Argentine biofuel to
qualify for the RFS.

That filled a vacuum that had been left when the European
Union (EU), then the South American country’s largest export
market, slapped anti-dumping tariffs on Argentine biodiesel in

But Trump’s promises to slap tariffs on imports and
renegotiate trade deals have worried the Argentine sector, which
would send more than 90 percent of its 1.5 million tonnes of
biodiesel exports to the United States, according to Molina.

“The outlook, keeping in mind what he said during the
campaign, is not good,” Gustavo Idigoras, director and
specialist in international biofuels trade at consultancy
Business Issue Management said on Friday. “These strong
protectionist policies could have an unfavorable impact on
biodiesel imports.”

Earlier this year, the World Trade Organization ruled in
favor of and annulled the tariffs, but that may not mitigate any
potential disruption to U.S. exports.

“The process of revising the (EU) measure will take some
time,” Idigoras said. “Losing the U.S. market would thus be a
nearly fatal blow.”

(Reporting by Maximilian Heath; editing by Diane Craft)

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