ARGENTINA

“Sustainable bioenergy: sowing the seeds of sustainable development”

November 10-12, 2011

ARGENTINA

PRESENTATION

•Argentina: facts and figures.

•Energy sector in Argentina.

•Reasons for the development of biofuels in Argentina.

Law Nº 26.093: main objectives.

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•Law Nº 26.093: main objectives.

•Availability of raw material for biofuels production.

•Recent developments in the Argentine biofuels sector.

• Actions for sustainable production of bioenergy.

•Conclusions.

ARGENTINA: FACTS AND FIGURES

Chief of state: Cristina FERNANDEZ DE KIRCHNER

Capital: Buenos Aires

Area: 3.7 million sq km

Population: 41.5 million inhabitants

GDP (purchasing power parity):

•US$ 590 billion / Oficial: US$ 370 billion

GDP - per capita (PPP): US$ 14,000 / Oficial: US$ 9,300

ARGENTINASource: CIA-The World Factbook and INDEC

ARGENTINE GDP ANNUAL GROWTH 2003/2010

IN PERCENTAGE %

8,59,0 9,2

0,9

9,28,7

8,8

6,8

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

2003 2004 2005 2006 2007 2008 2009 2010

ARGENTINE ENERGY CONSUMPTION BY SOURCE

Coal

2%

Others

4%

Nuclear

2%Hydro

6%

Natural Gas

41%

GASOLINE

25%

NATURAL

GAS

17%

ARGENTINA

Oil

45%

Source: Department of Energy, Argentina

DIESELOIL

58%

Argentina imports 8 to 10% of total diesel oil

REASONS FOR THE DEVELOPMENT OF BIOFUELS IN ARGENTINA

• Comparative advantages of Argentina in the production of oilcrops: large and fertile extensions of land available foroilseed production.

• Flexibility for the implementation of oilseed crops fromnatural and artificial irrigation.

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natural and artificial irrigation.

• An abundance of varied ecosystems fueling the growthof diverse crops.

WORLD SOYBEAN PRODUCTION 2010:

Country Production Share

million tons %

USA 91,0 35%

BRAZIL 70,0 27%

REASONS FOR THE DEVELOPMENT OF BIOFUELS IN

ARGENTINA

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Source: SOYSTAT- USDA - MAGyP

BRAZIL 70,0 27%

ARGENTINA 52,7 20%

CHINA 15,0 6%

SUBTOTAL 228,7 88%

REST 30,0 12%

TOTAL 258,7 100%

•One of the main exporters of vegetable oil in the world.

•The oil industry in Argentina is export- oriented,sending 95% of its production to the foreign market.

(2010 crushing capacity : 160,000 tons/day).

REASONS FOR THE DEVELOPMENT OF BIOFUELS IN

ARGENTINA

SOY OIL 7.0 Million Tons.

SUNFLOWER OIL 1.1 Million Tons.

OTHERS 0.1 Million Tons.

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Source: CIARA

OTHERS 0.1 Million Tons.

TOTAL 8.2 Million Tons.

ARGENTINA IS THE No 1 EXPORTER AND No 3 WORLD PRODUCER OF SOY OIL

REASONS FOR THE DEVELOPMENT OF BIOFUELS IN

ARGENTINA

ARGENTINA

THE No 1 EXPORTER AND No 2 PRODUCER OF SUNFLOWER OIL IN THE WORLD

MAIN TOOL FOR THE DEVELOPMENT OF BIOFUELS IN ARGENTINA

• The Argentine Congress approved in 2006 a law aimed to promote

the use and production of biofuels in the country.

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• 5% mandatory use of biodiesel and ethanol in all diesel oil and

gasoline consumption, January 1st, 2010. Currently 7% biodiesel

(10%).

AVAILABILITY OF RAW MATERIAL FOR BIODIESEL PRODUCTION IN

ARGENTINA

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ARGENTINE GRAIN PRODUCTION

ARGENTINE GRAIN PRODUCTION

- in million tons -

100,6

95,0

76,5

84,5

97,395,0

80,0

100,0

120,0

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Source: Ministry of Agriculture, Livestock and Fisheries of Argentina

69,4

62,0

76,5

67,470,869,2

-

20,0

40,0

60,0

80,0

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 20010/11

Argentine total grain production in 2009/2010 reached 93,3 million tons.SOY, CORN and WHEAT account for almost 90% of total grain production.

ARGENTINE GRAIN PRODUCTION

Total Grain Production 2009/2010 season:

Grain Planted area Production Share

million hectares million tons %

SOY 18,3 52,7 55%

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Source: Ministry of Agriculture, Livestock and Fisheries - Argentina

CORN 3,7 22,7 24%

WHEAT 3,6 8,9 9%

SORGHUM 1,0 3,6 4%

SUNFLOWER 1,6 2,2 2%

OTHERS 3,0 4,9 5%

TOTAL 31,2 95,0 100%

Soybean Production

Campaign2009 – 2010

52.7 million tons

ARGENTINE GRAIN PRODUCTION

Argentine Soybean Production

- in million tons -

60,0

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Source: Ministry of Agriculture, Livestock and Fisheries of Argentina-

85%40,5

10,9

20,1

46,2

3,8

52,7

-

10,0

20,0

30,0

40,0

50,0

60,0

1980 /81 1990 /91 1999 /00 2005 /06 2007 /08 2009/2010

300 kms.

MAIN IMPACTS EXPECTED FROM THE LAW

With the implementation of the 7% mandatory use of biofuels, the needed

production for 2011 is projected at:

• Biodiesel: 700,000 tons

• Vegetable oil: 720,000 tons. (9% of total current production).

• Soybean seed contains 18% oil, and 77% protein meal

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Oil, 18%Rest, 5%

Meal, 77%

RECENT DEVELOPMENTS

30 Biodiesel plants

Total production capacity: 3.0 million tons4.0 million tons in 2013

Total Investments: US$ 900 million

Argentine Biodiesel Markets

- i

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Source: Department of Energy and CARBIO(*) Projected

- in thousand tons -

168

1600

1150

725

1360

700

500

0

500

1.000

1.500

2.000

2.500

3.000

2007 2008 2009 2010 2011 (*)

Domestic

Export

1860

2360

RAW MATERIAL FOR THE PRODUCTION

OF ETHANOL

With the implementation of the 5% mandatory use of ethanol, the

needed production in 2011 is projected at:

• Ethanol : 250.000 tons.

ETHANOL

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• Quantity of corn/sorghum needed = 550.000 tons (2,5% of total

current production)

Currently total production of Ethanol is from Sugar Cane

ACTIONS FOR SUSTAINABLE PRODUCTION OF

BIOENERGY: SMART AGRICULTURE PROGRAME

PROBIOMASA

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Project to promote the use of Biomass

for Bioenergy.

-General Objective: To increase the production of bioenergy

from Biomass in rural, provincial and national levels.

- Partners:-Ministry of Agriculture

PROBIOMASA

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-Secretariat of Energy

-FAO

- Duration: 3 years

PROBIOMASA: EXPECTED IMPACTS

-Increase in the use of biomass: 12.000.000 tons annually

-Foreign exchange savings- USD 2.000 millions annually

-Investments estimated: USD 750 millions

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-Creation of new jobs.

- Improvement of energy security in at least 30 populations located in marginal areas.

-Emission savings: 9.5 million tons of CO2eq annually.

FOREST LAW No. 26331 – December 2007

The law establishes:

•A moratorium on any natural forest cutting until each provinceproduces a Native Forest Land Inventory and Land ManagementPlan.

•An obligation to produce an environmental impact study and hold

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•An obligation to produce an environmental impact study and holda public hearing before approving any clearing.

•Respect for the rights of rural communities over forests they use.

•A prohibition on open burning of forest cuttings waste.

FOREST LAW No. 26331 – November 2007

Argentine provinces have begun enacting land zoning policies under the Forest Law’s land management provisions,

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laying out areas where agricultural expansion is banned due to environmental concerns and areas where agricultural expansion is permissible.

Very High Conservation Value Forest Areas

Forest Conservation Areas

Potential Productive Areas

Current Productive Areas

CONCLUSIONS

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CONCLUSIONS

CONCLUSIONS

• Argentina has ideal growing conditions for the sustaineddevelopment of the raw materials needed for theproduction of biofuels.

• Argentina has immediate availability of the raw material

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• Argentina has immediate availability of the raw materialneeded to cover the 7% of mandatory use in all gasolineand diesel consumption.

• Argentina has already become one of the major producersof biofuels worldwide.

CONCLUSIONS

• From the economic and social point of view, the developmentof the Argentine biofuels industry is:

• Creating a new industry in our country.

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• Adding value to grain and vegetable oil production since

Argentina exports 70 percent of the corn and 90 percent

of the vegetable oil that it produces.

• Having a favorable impact on the environment.

HOW TO CONTACT US

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Ministry of Agriculture, Livestock and Fisheries of

Argentina

Paseo Colón 982 – Buenos Aires

Phone: (5411) 4349-2226 / 2111

Website: www.minagri.gob.arTHANK YOU