Jorge Antonio Hilbert 2016-05-03 01:54:42
Argentina is the second largest country in South America, and it is generously endowed with high-quality land resources. The most fertile and productive land, known as the Pampas, covers about 50 million hectares, mostly in the central provinces of Buenos Aires, Cordoba, and Santa Fe. There are other productive areas, too, especially in the northeast and northwest. In recent years, oilseed acreage in the northwest provinces (Santiago del Estero, Tucuman, Salta, and Jujuy) has expanded. However, the Pampas produces most of the country’s grain and oilseeds. The proximity of the Pampas to the Atlantic Coast also favors the export of grain and oilseed products. Because of Argentina’s large areas of high-quality land and the relatively small population, most of the country’s production is exported. In the last decade, approximately 28% of Argentina’s soybean production was exported in unprocessed form, while over 90% of the remaining production was exported as biodiesel, soybean oil, and soybean meal. In fact, Argentina is the world’s largest exporter of biodiesel and soybean oil, and the world’s second-largest exporter of soybean meal. Because such large portions of the national soybean production are exported, shipping facilities are a critical link in Argentina’s grain and soybean production chain. Argentina’s most active shipping ports are on the lower Parana River. The politics of biofuels The production of biodiesel using feedstocks derived from food crops has been subject to increasing scrutiny. One factor in this scrutiny has been public concern about sustainability, although there is no evidence linking biofuel production to deforestation, food insecurity, or increased greenhouse gas emissions. Public perception can also change very quickly. Advocacy groups, NGOs, and environmentalists all have large influences on public opinion. When public opinion changes, policy makers try to respond by promoting changes in legislation. This activity has been particularly evident for multipurpose crops such as corn, sugarcane, and soybeans when they are treated solely as energy crops without considering their use as food. To provide support for proposed legislative changes, policy makers ask scientists for research-based evidence. However, good research takes time. The difference between political urgency and the scientific method often involves a discrepancy in speed. If changes in legislation happen too fast, then the science behind them will be weak. The consequences of illinformed policy are wrong decisions and costly remediation. In previous years, researchers used various models to predict the long-term effects of biofuel production. As a consequence of those earlier studies, certain biofuels were restricted in anticipation of effects that did not happen, and that may never happen. In a review of the literature, we found that most of the modeling studies that focused on biofuel production lacked a systematic overview of the entire production chain. Biofuel production involves agronomic knowledge and experience, transportation and logistics for the process inputs and outputs, industrial capacity, as well as marketing, technology, and economics. This complex system also includes multiple synergistic interactions that have effects in other industries with only indirect connections to agriculture. In the past ten years, the growth and commercialization of biofuel production and the changes in national energy policies have demonstrated that the forecasts made ten years ago are often very different from what actually happened because many of these beneficial interactions were not foreseen and were not taken into account. The biodiesel sector In Argentina, a biofuel law enacted in 2007 mandated 5% biofuel blends in fossil fuels. The blend percentage was increased to 7% in 2010 and to 10% in 2014, and the bioethanol blend may increase to 12.5% in 2016. The national government has encouraged biofuel production to reduce Argentina’s dependence on imported fossil fuels. An additional concern is Argentina’s declining domestic petroleum production, due to aging wells, combined with an increasing demand due to high economic growth. The Argentine biodiesel sector has grown based on the well established soybean production chain. Economies of scale and supply chain efficiency were exploited, and this made Argentina biodiesel a competitive product in the international market. Most biodiesel refineries are located near the processing plants and shipping facilities, which lowers costs and reduces emissions. Raw materials typically come from a radius of 300 km or less, which further helps to increase efficiency. Small and medium-sized enterprises are being built in other regions. These smaller enterprises receive special price incentives and a share of the national market. Argentina reached a total biodiesel production capacity of nearly four million tons in 2013. Production kept rising in 2014 but decreased in 2015 due to changes in international rules and the drop in petroleum prices. The bioethanol sector Bioethanol, produced from sugarcane, has historically been concentrated in three northwest provinces: Tucuman, Salta, and Jujuy. As of 2015, sugarcane production has increased to 380,000 hectares, with a total capacity of 465 million liters of ethanol. Production in Tucuman is based on small farmers selling their product to local mills. In Salta and Jujuy, production is based on integrated systems, with large plants that have their own land. Many of the bioethanol mills are old, but they have been receiving new investment in recent years. Today, a total of 23 mills process 24.5 million tons of sugarcane every year. In most cases, they are self-sufficient in energy production, and their surplus electricity is sold to the national grid. Corn ethanol is new in Argentina. Production started in 2012 in high-tech plants located in the central provinces of Cordoba, Santa Fe, and San Luis. Currently, five plants are in operation, processing 1.5 million tons of corn and producing 484,500 m3 of bioethanol and 436,000 tons of distilled grains (dry and wet). Argentina’s mandated biofuel blend is now being achieved with ethanol from both corn and sugarcane. Last year, for the first time, corn ethanol surpassed sugarcane ethanol for use in biofuels. The biofuel industry has become a strategic sector in Argentina’s economy, contributing significant hard currency income from export taxes as well as from the decrease in petroleum imports. The biofuel industry has also had other positive effects for the country, including new investments, job creation, a domestically sourced renewable energy source, and above all a huge stride toward sustainability and respect for the global environment. A major part of this success is due to Argentina’s natural resources. Because of our agricultural abundance, no conflicts have arisen regarding food/fuel tradeoffs. We grow enough for both food and fuel, and we produce a large surplus to export. ASABE member Jorge Antonio Hilbert, International Advisor on Innovation Management, National Institute for Agricultural Technology (INTA), Universidad Tecnológica Nacional, Buenos Aires, Argentina, email@example.com.
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