Argentine Biofuels Exports Spike Unlikely

A policy change allowing Argentina's biofuel producers another way to qualify for U.S. biodiesel credits will not hugely boost fuel exports from the South American country, the head of the Argentine Biofuels Chamber (Carbio) said.

Argentina already ships biodiesel to the U.S. market, but the policy move stoked concerns from U.S. producers that imports will increase and threaten their market share.

Those fears sparked this week a drop in futures for U.S. soyoil, which is used for biodiesel. Prices tumbled to 29.32 cents per lb, the lowest since February 2009.

Carbio head Luis Zubizarreta said in an interview, however, that the policy move would not suddenly make a big difference in biofuel inflows from Argentina.

"Argentina was already exporting biodiesel to the United States and will continue to export volumes not that different to previous ones," he said, estimating exports to the United States of no more than 300,000 tonnes this year.

Argentina last year exported 200,000 tonnes of biodiesel to the United States, a fraction of the 1.4 million tonnes it exported worldwide.

The U.S. Environmental Protection Agency (EPA) said on Tuesday it approved the alternative tracking method, which will give Argentine biodiesel producers a second way to show that soy used in their biofuel is grown on fields that were not deforested.

"What the EPA did is approve a specific scheme suggested by Carbio that was already adapted to our production but it still has all the requirements for trackability that the previous scheme had," said Zubizarreta.

The Argentine official echoed comments made earlier this week by EPA, which said its new program for Argentina biofuel makers would not prompt higher flows of fuel imports from the country.

(Reporting by Maximilian Heath, Additional reporting by Maximiliano Rizzi; Writing by Sarah Marsh; Editing by Richard Chang)