Paraguayan Biofuels Sector Continues to be Sluggish28 July 2014
PARAGUAY - The Paraguayan biofuels sector continues to move at a sluggish pace. Ethanol production and use continues to expand as a result of increased gasoline sales.
The current mandate mix is 25 per cent and there are rumors that it could be increased to 27.5 per cent (mirroring current discussions in neighboring Brazil) in the next few months. Roughly half of the ethanol is made from sugarcane and the other half from grains (mostly corn).
The high cost of cane has made ethanol producers be able to use different feedstocks, expanding their capacity to use grains.
A new ethanol plant is expected to come on line during 2014 in the northern Departament of Amambay, taking the country’s ethanol production capacity to 290 million liters. There are no ethanol exports projected in 2014 or 2015.
Biodiesel production for 2015 is forecast at 8 million tons, similar to 2014. This sector is going through a difficult situation as Petropar, the national oil company, does not want to pay a higher price for biodiesel than what it costs them to import diesel.
Contacts indicate that private fuel distributors are not even complying with the 1 per cent mandate mix. The government has recently created a biodiesel multi-institutional working group to study the sector and make recommendations to put in place new regulations and a commercialization system to promote and expand its use.
Biodiesel production is made from vegetable oil. The local press indicates that an Italian company is analyzing investing in a new plant to produce and export some 10-15 million liters of biodiesel a year.
You can view the USDA GAIN: Paraguay Biofuels Annual 2014 report by clicking here.
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