Although renewable energy sources haven’t hit the mainstream just yet in Argentina, “the biofuels industry is finally coming together,” according to Carlos St. James, president and founder of the Argentine Renewable Energies Chamber (AREC).
Recent developments mean that biodiesel, wind, water and ethanol, the latter which in some cases comes from pig manure, will increasingly be fuelling homes and vehicles.
Although biofuels currently supply just one percent of all energy to the domestic market, according to St. James, legislation will require them to provide eight percent by 2016. In addition, the government recently upped the blend of biodiesel with regular diesel from five percent to seven, an important move in a world increasingly reluctant to be fossil fuel-dependent.
The fifth-largest biofuel provider in the world after Germany, the US, France and Brazil, Argentina has two main sources: biodiesel and bioethanol. Sugarcane, grown in the north of Argentina, is the feedstock for the nine companies which produce ethanol in Argentina, while soy oil is the basis for the country’s 19 biodiesel-producing firms, excluding one which converts used cooking oil into the finished product.
Indeed, one enterprising pig farm in Buenos Aires province lucratively converts pig manure into biogas in order to self-power.
Overfeeding. “At the moment, Argentina has more feedstock than it knows what to do with,” St. James told the Herald. “The Chinese aren’t buying our soy oil any more, and so we suddenly have a glut which isn’t finding its overseas market, plus (Planning Minister) De Vido is finding a good application for that extra soy oil. That also means we no longer have to import diesel fuel from Venezuela which is particularly toxic and high in sulphur — so we’re producing our own biodiesel fuel which is cleaner, biodegradable and keeps the money in the country. There’s a lot of upside and very little downside.”
Biodiesel has progressed more than ethanol in terms of quantity produced and margins made, converting 2.6 million tons a year into US$2.1 billion — although 65 percent is exported, mostly to Europe, which has a surplus of biofuel plants but not enough feedstock.
Up to seven. Following a resolution to Law 26,093 in March this year, oil companies now mix diesel fuel with five percent of biodiesel (B5), which obviously led to an increase in demand to the domestic market. But on June 30, President Cristina Fernández de Kirchner instructed her Energy Secretary Daniel Cameron to hike that blend up to seven percent (B7) next month, with the intention of eventually reaching 10 percent (B10).
“Biodiesel really is Argentina’s shining star,” added St. James. “The aim is to reach B10 levels by year-end. That really is a big deal and would make Argentina the country with the highest biodiesel mandate in the world by a long shot, if it isn’t already with the B7 resolution.”
And following last week’s green light with regards to the construction of three renewable energy plants to bring the total to 22, which will provide a total of 895 megawatts (MW), 110.4MW will eventually come from biofuels — no mean feat for an industry which only came into existence in May 2006 thanks to the Argentine Biofuels Law 26,093.
However, 500MW will come from wind farms, which is set to become the country’s second-largest renewable energy source, said St. James. “One of the unexpected winners from that deal was thermal energy — good old-fashioned generators that will work on biofuel which have fewer greenhouse emissions instead of diesel fuel.”
Back in 2008, this fledgling market saw US$12 billion of investments in Latin America, according to the AREC, although US$10 billion — went to Brazil’s ethanol plants.
“The other four countries that rank above Argentina all have access to financing, venture capital and legislation,” said St. James. “Here in Argentina we have none of that, but we still rank fifth in the world in terms of production. Just imagine what we could do if we did have access to financing and banks!”
Bean plant. Argentina’s biofuels industry received a further boost last week when local biodiesel producer Renova confirmed it is to invest US$350 million in a new plant located in Timbúes, Santa Fe province, which will process soya beans.
To add icing on the cake, EADS, Airbus’ owner and Europe’s main plane builder, undertook a test flight using a 100 percent microalgae-based biofuel made by Argentina’s Biocombustibles del Chubut.
A first for biofuels, a Diamond DA42 took off from the Berlin ILA air show last month, and was a flight two years in the planning, according to Marcelo Machín, president of the Chubut-based producer.
An important development in an environment increasingly hostile towards fossil fuels, algae can be produced in sufficiently large quantities without competing with food production for fertile land or potable water. St. James said: “A global race is on to find the right strain of microalgae which produce a lot of oil. Biofuels need a vegetable oil to be produced and if you squish seaweed, plenty of algae oil comes out.
“But the challenge is how to grow it quickly. Seaweed needs carbon dioxide and sun so it would grow perfectly next to an old, contaminating cement plant. These little gunky critters double in size in 24 hours, which is why it has caused so much excitement — you have an instant and tremendous feedstock.”
And Dr. Jean Botti, chief technical officer at EADS, added: “This opens up the feasibility of carbon-neutral flights. Third-generation biofuels are more than just a replacement for fossil petroleum — they push the possibilities of future propulsion.”
The Puerto Madryn-based factory is set to receive a sister plant in Sao Paulo which would produce and refine microalgae oil and EADS is hoping to attract 20 million euros worth of investment for it.
While former vice-chancellor Fernando Petrella says Argentina is ripe for investing in terms of biofuels, he is uncertain as to why Sao Paulo is the location for the new plant.
“Given that we are one of the world’s largest suppliers of green energies, this could be an integration point for Argentina to regain its position in the world and the G20. But it’s surprising to me why Biocombustibles del Chubut has chosen Sao Paulo over Argentina. People want to know more about this,” he said to the Herald.
Despite his uncertainty, the former vice-chancellor pointed to the investment opportunities in Argentina. “In spite of the problems this marvellous country has had — and there are three in my opinion, World War II, the Malvinas conflict and the 2001 crash — it is still able to do biofuel business which was to the tune of US$2.1 billion last year.”
St. James added: “This really is a moving industry. Last year Argentina produced and exported 1.2 million tons of biodiesel at a cost of a little under US$1,000 per ton. That makes it a billion-dollar industry. Argentina is always on the brink of an energy crisis. But now that the government is finally understanding the opportunities the biofuels industry is offering, those days may be over.”
Let there be light, and hot water…
There’s more to Misa Rumi, a village set at the immense height of 3710m on the Andean Puna in Jujuy, than meets the eye.
Home to around 50 families, Misa Rumi has been exclusively powered by solar energy since 1997, and is the only such place in the world. Over the years, the village’s solar technology has developed thanks to local NGO EcoAndina and it now houses an ecological activities centre. Paul Byrne, a freelance videojournalist based in Argentina, visited Misa Rumi six weeks ago with EcoAndina. He talked to the Herald about his experience.
“This is a developed solar village which has been functioning for several years. The villagers have solar ovens, solar tools and hot water heating which is necessary for such an extreme place — it can reach 30 degrees Celsius in the day but fall to minus 15 at night,” he says.
“The project has helped the local community who previously had no electricity and it’s now the only totally sustainable community in the world. EcoAndina trains up a member of the village to be in charge of the equipment, which in Misa Rumi’s case is Julián Martínez.
“It’s remarkable to see the first world meeting with this rural community. The Misa Rumi villagers used to live in a world of minimum conditions, but if you climb a bit higher up the mountain, you can see the solar panels shining off the peaks which is striking. It’s exciting to see modern technology in this tiny community.
“The only complaint the villagers have about it is that they want more technology!”
First published in the Buenos Aires Herald on July 9 2010.