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CLARIN

Biofuel Or Fossil Fuel? For Argentina, It's A False Choice

As the world moves to reduce the role of hydrocarbons, Argentina must exploit the biofuels potential of its vast farming sector, not entertain dreams of becoming a regional oil power like Venezuela.

Fossil fuel subsidies must be removed. It is not a question of if, but when.
Fossil fuel subsidies must be removed. It is not a question of if, but when.
Eduardo Trigo

BUENOS AIRES — Debate over biofuels has been heating up in Argentina, one of the world's biggest agriculture producers, amid the closure of the U.S. market and volatile price levels.

This is happening after the United Nations announced that last year was the worst ever in terms CO2 emissions — and if we continue with the same energy policy, the UN has warned, world temperatures could rise by as much as 8 °C by the end of the century. Biofuels alone will not solve the problem, but without a doubt, whichever strategy is chosen, it will include them as an important component. If Argentina changes the rules of the game now, it will send the world a signal at odds with our commitments and our stated intention to fully reinsert ourselves in the global community and reduce global warming.

The road ahead requires us to rethink our strategy.

In 2016, the Rockefeller Family Fund concluded there were no longer economic nor ethical reasons for investing to extract oil, while even Saudi Arabia has begun contemplating a future where oil will not have the same dominant role it plays today in its economy.

Other studies on oil's potential in Argentina indicate it has far less of the value to our economy than is being attributed to it, with overblown promises of the Vaca Muerta deposits turning us into a Saudi Arabia of the Southern Cone. At the very least one would have to properly analyze what has been done so far, because even if Vaca Muerta has potential, we have arrived late. The big players of the hydrocarbon market are already changing their strategic visions and thinking of a future without oil. There will be problems of demand as societies seek more sustainable living and consumption patterns, unrelated to how much reserves are left.

That does not mean we should not exploit Vaca Muerta. We must, and quickly, but only to generate resources to transform our economy and not to enhance oil's role in our energy ecosystem. Here, curbing incentives for biofuels is a delay like U.S. tariffs are a harsh blow.

Again, the road ahead requires us to rethink our strategy, which has shut in a vicious circle of poverty.

It is not a question of if, but when.

Biofuels are furthermore a key element in developing a sustainable economy where development does not necessarily entail environmental degradation, but lays the basis for strategies to balance people's economic expectations with management of shared goods like air, soil and water. Biofuels policies should become a market standard meant to promote the eventual substitution of fossil fuels in all areas, including such innovative and dynamic markets like jet fuel. Fossil fuel subsidies must be removed. It is not a question of if, but when, so we should anticipate the scenario and build an energy grid to fit that reality.

That would also be a first step toward exploiting our proven competitive advantage as a producer of biomass or agricultural products. This is crucial to any moves to restore dynamism to regional economic development, and the ability of these economies to generate revenues and quality jobs.

Recent events — like slow progress made at the WTO, the lack of a pact between the EU and Mercosur, and U.S. tariffs — must become incentives for change, not reasons to keep the status quo. It is a serious error to see biofuels as an isolated sector instead of a component of wider economic and territorial development. In a world that is challenged and concerned with the decline of resources and climate change, these are opportunities that cannot be spurned. Our response and strategy now must be: more bioenergy, food and biomaterials, and using our energy crisis and foreign market restrictions to become more competitive. That is our leverage for the future.

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