The biodiesel industry has grown significantly in recent years. Initially, it focused on exports, taking advantage of Argentina's natural strengths as a soybean producer. After the implementation of domestic blending, sales to the local market also increased.

Domestic regulations prioritize SMEs to supply the domestic market. Conversely, larger companies focus on the export market and currently have very little participation in local sales. These larger companies are heavily concentrated in the province of Santa Fe.

On the other hand, companies with a production of up to 50.000 tons per year share the local market and practically do not ship abroad. They enjoy a differential price to sell to the domestic market.

Between 2012 and 2013, the biodiesel industry was subject to two sanctioning measures by the European Union in general, and Spain in particular. At the end of April 2012, the Spanish government decided to begin suspending the purchase of Argentine biodiesel, replacing the old suppliers with European manufacturers, until reaching the definitive closure of the market in November 2013.

But without a doubt, the biggest blow to the biodiesel industry was the implementation of an anti-dumping tariff directly by the EU.

Fortunately for the industry, the national government responded quickly, and biodiesel production benefited from an increased domestic blending allowance , tax exemptions, and a reduction in export duties. Thus, by the end of 2014, the biodiesel industry appeared to have fully recovered, far exceeding pre-crisis levels.

However, the recovery was short-lived. Towards the end of 2014, the collapse in fuel prices discouraged the use of biodiesel for blending with diesel fuel. The result was a collapse in our country's exports, which have remained at minimal levels ever since.

During the first half of 2015, external sales of biodiesel barely reached 236.550 tons, less than half that in the same period of 2014. Not only that, but in turn when local companies managed to place their products abroad They did so at a price that on average was approximately 25% lower than what they received until the previous year.

Unfortunately for the biodiesel industry, everything seems to indicate that the world is heading towards a scenario of cheap fuels, at least in the next two years.

The general consensus is that the WTO will rule in Argentina's favor regarding the dumping allegations. However, this ruling would not take effect until the end of next year. Meanwhile, exports to the EU will present new challenges.

Based on the scenario presented here, the biodiesel industry will face a sharp decline in 2015, and it is estimated that it will remain stagnant at low levels in 2016.

The current institutional framework is detrimental to production in the province of Santa Fe and favors the installation of small-scale and less efficient factories.

Although greater inclusion of larger-scale companies in the domestic market could cause inconveniences in the business of SMEs, it would be at least desirable to take measures to prevent a crisis in larger factories that is combined with greater investments in plants of up to 50 thousand tons.