Bolivia betting on biofuels
Bolivia is entering into the biofuel era as a new agreement to supply 80 million litres of domestically produced sugarcane ethanol was signed between the Ministry of Hydrocarbons, the state-run oil and gas company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) and the Federación de Empresarios Privados de Santa Cruz. The agreement comes as the country moves to introduce an E10 blend mandate during 2018.
According to the Memorandum of Understanding (MoU) signed March 8, the agroindustrial sector will supply 80 million litres of ethanol to YPFB in the first year, a volume that will displace imported gasoline worth approximately BOB 400 million (≈ US$57.7 million) in the first year.
Here not only one sector benefits, but Bolivia wins, that’s thinking about Bolivia. Not only the sugarcane worker wins, not only the region of Santa Cruz, but all Bolivians win, remarked Bolivian President Evo Morales who attended the signing ceremony.
He added that approximately 18 000 hectares of sugarcane will be added annually until reaching an area of 155 000 ha by 2025 and that the production of ethanol will be increased from 80 million litres to 380 million litres over the period.
Among the expected impacts of incorporating domestic ethanol into the Bolivian energy mix is energy security. This is achieved through a gradual reduction of fuel imports, a reduction of the subsidy for the imported gasoline a guaranteed fuel supply and strengthening of ties between the private sector and the State.
The hydrocarbons sector is very important in the Bolivian economy, we supply gas to thermoelectric plants, to mining, soon to the lithium project, to industry and agriculture with the production of urea and today we become partners with the agro because we are going to buy large volumes of anhydrous alcohol, Luis Alberto Sánchez, Minister of Hydrocarbons said.
In addition to increasing the production of sugarcane and displacing up to 380 million litres of gasoline imports by 2025, the economy will be boosted through the investment of US$ millions and generate an estimated 27 000 new jobs.
Buying 80 million litres of ethanol means that we will stop importing 80 million litres of gasoline, that has an impact on the trade balance directly. We are talking about 400 million bolivianos that are going to be reinjected into the national economy. We are talking in 2025 of more than two billion bolivianos not leaving the country and be reinjected directly into the economy by buying 380 million litres of alcohol, said Óscar Barriga Arteaga, CEO, YPFB.
He added that the issue will have a direct impact on the Gross Domestic Product (GDP) that will reach a percentage point during the first year and between 0.4 to 0.5 of GDP increase in the following years. The state oil company plans to invest more than US$5 million to adapt its facilities, storage systems, injection system, adequacy of service stations and marketing in general.