Capturing latecomer advantages in the adoption of biofuels: The case of Argentina

Although Argentina came late to the biofuels revolution, a series of measures taken recently at federal and provincial government level have created new opportunities. New federal laws on biofuels promotion have sparked an investment boom. The main activity has been in the biodiesel sector--partly because diesel is the dominant fuel sector in Argentina, and partly because the country had already engineered a soy revolution over the past 15 years, becoming the world's largest exporter of soy oil and soy meal. Biodiesel allows this revolution to be extended--from soy as foodstuff to soy as fuelstock. The biodiesel revolution now underway promises to extend Argentina's latecomer advantages by combining greater scale and lower costs with introduced technical innovations such as genetically modified crops and no-till farming. In this way, Argentina can be seen to be demonstrating the superiority of biofuel production in countries of the South over the conditions obtaining in countries of the North--including superior resources availability, superior energetics and lower costs. Whereas Brazil has demonstrated its superiority in sugarcane-based ethanol, Argentina is about to demonstrate its superiority in soy-based biodiesel.