Biofuels

On July 12, 2010, Resolutions No. 553/2010 and 554/2010 were issued by the Secretary of Energy (“SE”). These resolutions have amended Biofuels regulation with the purpose of raising supply for its blend with diesel oil fossil fuel within the Regulation and Incentive Regime for Biofuel Production passed by Law No. 26,093 (the “Biofuels Regime”). 

This resolution has approved new quota levels for Bioethanol production in addition to those already authorized by Resolution SE No. 698/2009.

Final approval for these new Bioethanol production quotas is subject to the completion of the work programs undertaken by the firms which have requested the additional volumes.

This resolution ratified an Addendum to the “Agreement for Biodiesel Supply for its blending with fossil fuels in the national territory”. 

The addendum was executed on July 5, 2010 by the SE and Biodiesel manufacturers (the “Manufacturers”). The original agreement had been ratified by Resolution SE No. 7/2010. Resolution SE No. 554/2010 amended the previous resolution, as described below:

(i) The Enforcement Authority must now report to companies responsible for performing fuel blending, the prospective diesel oil supply needs the relevant period, maximum refining capacity of oil companies, review of data collected in previous months, inter alia, besides  reporting quantities determined to perform fuel blends and dates fuels may be retrieved, as already foreseen.

(ii) Biodiesel percentage in the final blend with the diesel oil fossil fuel will no longer be 5% but 7% of the total diesel oil volume to be marketed in the National Territory.

(iii) The Manufacturers must file a monthly sworn statement reporting production quantities effectively delivered in the previous month, identifying its destination. 

Moreover, in the Addendum ratified by Resolution SE No. 554/2010 it was agreed that:

a) The Manufacturers commit to supply Biodiesel quantities established therein up to the moment when the supply of projects under the Biofuel Regime is enough to match the quantities required to reach a minimum of a 7% blend with fossil fuels. 

b) The Biodiesel to be delivered must be produced by the Manufacturers. Should the quantities committed could not be supplied due to technical inconveniences or if more volumes of biodiesel should be required, the other Manufacturers will supply them.