Argentina, Brazil agree on biodiesel, ethanol cooperation

Argentina, Brazil agree on biodiesel, ethanol cooperation

Buenos Aires (Platts)--9Oct2006

Argentina and Brazil agreed Monday to work together on the development of
biofuels, a spokeswoman for the government said. Argentine Planning Minister
Julio De Vido and Brazil's Development and Industry Minister Luiz Furlan
reached the agreement in Buenos Aires, the spokeswoman for De Vido's ministry
said.

"The experience that Brazil has in the area of biofuels will be made
available to the Argentine government and executives," Furlan was quoted as
saying by Argentine state newswire Telam after meeting with De Vido,
Argentina's chief energy planner, and other energy officials.

Brazil, the world's biggest producer of ethanol from sugarcane, is
expanding exports of its biofuels and expertise. Argentina is stepping up
production and use of biodiesel and ethanol to ease demand for fossil fuels in
the face of a declining supply of oil and natural gas that is pushing the
energy-exporting country to greater reliance on imported gasoil, fuel oil and
natural gas.

In 2010, all diesel and gasoline must contain at least 5% plant-based
fuels. Argentina has ample supplies of corn, soybeans and other feedstock for
ethanol and biodiesel. Companies are planning major investments to develop the
products with an eye to exporting so as to tap growing demand for the fuel
additives. Last month, the country?s biggest corn association Maizar said it
would invest $4 billion over the next five years to produce 4 million cu m/yr
of ethanol for export.

Billionaire financier George Soros is considering an up to $500 million
investment in an ethanol plant. Furlan is on a two-day visit to Argentina. He
is set Tuesday to meet with energy officials of Argentina again.

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