BUENOS AIRES, Nov 22 (Reuters) - Argentina’s biodiesel producers fear losing access to the United States, the destination of nearly all their exports, after Donald Trump’s surprise victory in presidential elections earlier this month, representatives of the sector said.
The Republican candidate, who is skeptical of climate change and has advocated scrapping or renegotiating trade deals, has raised alarms in a sector already reeling from a series of setbacks in international trade in recent years.
Argentina is one of the world’s largest biodiesel exporters, and is home to processing plants belonging to multinational producers like Cargill Inc and Bunge Ltd.
“The level of uncertainty is very high,” said Claudio Molina, executive director of the Argentine Biofuel Association in a recent emailed statement. He said the sector was worried Trump might scrap policies meant to reduce the United States’ contribution to climate change, affecting demand for biofuels.
In 2005, the U.S. Environmental Protection Agency (EPA) implemented a policy requiring a minimum level of renewable fuels to be blended into transportation fuel.
Trump has said he supports the program, known as the Renewable Fuel Standard (RFS).
Argentine exports to the United States grew substantially after 2015, when the EPA made it easier for Argentine biofuel to qualify for the RFS.
That filled a vacuum that had been left when the European Union (EU), then the South American country’s largest export market, slapped anti-dumping tariffs on Argentine biodiesel in 2013.
But Trump’s promises to slap tariffs on imports and renegotiate trade deals have worried the Argentine sector, which would send more than 90 percent of its 1.5 million tonnes of biodiesel exports to the United States, according to Molina.
“The outlook, keeping in mind what he said during the campaign, is not good,” Gustavo Idigoras, director and specialist in international biofuels trade at consultancy Business Issue Management said on Friday. “These strong protectionist policies could have an unfavorable impact on biodiesel imports.”
Earlier this year, the World Trade Organization ruled in favor of and annulled the tariffs, but that may not mitigate any potential disruption to U.S. exports.
“The process of revising the (EU) measure will take some time,” Idigoras said. “Losing the U.S. market would thus be a nearly fatal blow.” (Reporting by Maximilian Heath; editing by Diane Craft)