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 News

29/01/2018 0:00 - Economics
JULIO CALZADA - ENRIQUE LASGOITY - FRANCO RAMSEYER
The participation of Field and Agroindustry in the production of energy increases in Argentina.

Both sectors contribute with 6.2% of primary energy production and 5.5% of secondary energy production in Argentina. The biodiesel industry leads the growth ranking: in 10 years, it increased its production capacity by 700%.

Three indicators show the sectors contribution to the the Energy Offer in our country. In the first place they contribute with 6.2% of the primary and 5.5% of the secondary energy production in Argentina. Biodiesel and Bioethanol, together, contribute 4% of the Argentine production of secondary energy. These are relevant figures, taking into account that the Biodiesel Industry has started showing an important production capacity just since 2007, with the installation of large factories, and the corn-based bioethanol industry was born very recently, in 2012. From now on the indicators analysis is presented:

Indicator No 1: Field and Agroindustry contribute with 6.2% of the Argentine primary energy production.

These sectors make an interesting contribution to the production of primary energy in Argentina through four components: Vegetable oils (the one that emerges from the industrialization of soy bean and sunflower seed), firewood, cane bagasse sugar and vegetable alcohols (that arise from the processing of corn and sugarcane). These four components produced around 4,596 thousand TOE (tonne of oil equivalent) in 2016, which represents 6.2% of the primary energy production (PE) of the Argentine Republic. The Argentine total PE production amounted to 74,358 thousand TOE in that year. Globally, Natural Gas and Petroleum both produce almost 65% of primary energy. At a local level, however, these two produce both almost 90% of Argentina's primary energy. The fact that the field and the agro-industry are generating a little more than 6% of the primary energy is a remarkable achievement of Argentina, especially considering that for the year 2007 there were almost no important biodiesel or corn-based bioethanol industries in the national territory. In the last 10 years, with new investments in this field, this important participation was reached. The data can be seen in table No 1.

 

Indicator No 2: Field and Agroindustry contribute with 5.5% of the Argentine secondary energy production.

Field and agorindustry show a relevant contribution to the secondary energy production in our country, as it can be seen in table No 2. It participates throughout the following components: biodiesel, bioethanol, charcoal and coke. These items produced around 4,537 thousand TOE in 2016, which represents 5.5% of the secondary energy production (SE) of the Argentine Republic. The total national SE production amounts 81,937 thousand TOE.

It is important to highlight that six traditional items represent 85% of secondary energy production: gas distributed by networks, electric power, diesel plus gas oil, naphtha for motorbikes and liquefied gas. The 5.5% contribution from field and agro-industry is very helpful to satisfy the energy demand in our country.

 

Indicator No 3: Biodiesel and Bioethanol contributes with 4% of the national secondary energy production.


Biodiesel and Bioethanol contribute together 4% of the national production of secondary energy, as it can be seen in Table No 2. The Argentine Biodiesel Industry is a surprising case: in the year 2007 it used to have only 9 factories throughout the national territory with a theoretical production capacity of 665 million liters (based on USDA). Today, it has 37 plants (including some of the largest in the world) with a theoretical production capacity of 5,400 million liters. This capacity was multiplied by 8 in just 10 years. Another huge positive impact is the employment generated by these plants, which amounts 2,000 direct jobs and no less than 4,000 indirect jobs.

Also, the corn-based bioethanol industry has had an important growth since 2012, when the first plant was installed in “Río Cuarto”, in the Córdoba province. This sector started growing as a consequence of the obligatory blend rate settled by the Argentinian Government.

Nowadays there are five companies in Argentina with a combined theoretical production capacity of around 514,500 cubic meters of ethanol per year. The firm with the biggest annual production capacity is “ProMaiz S.A.”, owned by “Aceitera General Deheza S.A.” and “Bunge Argentina S.A.”, which can produce 135,000 cubic meters of ethanol per year. Next is “ACA Bio” from the Argentinian Association of Cooperatives, with a capacity of 125,000 cubic meters per year. On the third and fourth place are “Diaser” and “Bio 4” with 82,500 and 82,000 cubic meters, respectively.

On the other hand, there are 10 important factories which obtain ethanol by processing sugar cane. Six of them are located in the province of Tucumán, 2 in Salta and 2 in Jujuy. In total, according to data from the Argentine Minister of Agroindustry, the theoretical production capacity of these 10 firms is around 482,850 cubic meters per year.

In conclusion, Argentine total ethanol production (with its 15 main factories) amounts 997,350 cubic meters per year.

Definitions:

Tonne of Oil Equivalent (TOE ): is a unit of energy defined as the amount of energy released by burning one tonne of crude oil. It is approximately 42 gigajoules or 11,630 kilowatt hours.

Primary and Secondary Energy : The planet supplies us with energy from its natural resources (the sun, fossil fuels, wind, natural gas, etc.). Most of the time these resources are not directly usable, they need to be transformed, physically or chemically, for its final use. The energy available in nature, before being converted or transformed, is what is called "primary energy". Once transformed it becomes “secondary energy”.

 

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