MADRID, (Reuters) – Spain retaliated against Argentina yesterday for seizing control of Spanish-owned energy company YPF with a measure that could curtail multimillion-dollar imports of biodiesel from the Latin American nation.
The Spanish industry ministry will approve a biodiesel plan later, Deputy Prime Minister Soraya Saenz de Santamaria said after a weekly cabinet meeting. She gave no details, but one possibility would be a measure giving preference to European Union-produced biofuel in meeting compulsory motor fuel blending requirements.
Spain’s biodiesel industry has lobbied for years for such a rule. Industry sources estimate that Spain imported 720,000 tonnes of biofuel from Argentina in 2011, worth some 750 million euros (US$990.6 million). Spanish biofuel plants are running at an estimated 14 percent of capacity.
“The goal is to encourage the use of biodiesel of EU origin,” an industry ministry source said. In all, 74 percent of biodiesel used in Spain is imported, and 90 percent of that comes from Argentina and Indonesia. Spain has threatened “consequences” for Argentina since it decided to expropriate 51 percent of YPF from Madrid-listed Repsol.
But tough action is difficult against a country that has been shut out of world debt markets and has ignored international fines in previous disputes. Argentine President Cristina Fernandez said yesterday that her country could use more biodiesel itself if Spain cuts imports.
“We are in a position to absorb that production,” Fernandez said, adding that her government would not complain to the World Trade Organization if Spain reduced its purchases.
