Colombia

Summary of national biofuels policy and strategy - updated 22nd August 2008

Biofuels substitution targets

Targets: 10% ethanol and 5% biodiesel substitution by 2008.

Date set: - Law 693 (September 2001) made 10% ethanol blend mandatory in larger urban areas. Law 939 (September 2005) allowed the Ministry of Energy to establish regulations, and gave the Ministry of Agriculture the responsibility of promoting production of oil crops needed for bio-diesel production. In 2005 a 5% bio-diesel blend mandatory for 2008.

National policy and trends in biofuels crop development

Sugarcane and palm oil are the major feedstocks used in Colombia to produce

ethanol and bio-diesel respectively. When targets were set national capacity was insufficient and the Colombian government established tax incentives to encourage the production of both ethanol and bio-diesel. Biofuels are tax exempt as are new plantings (for a ten year period 2003-2013) of selected agricultural crops including Palm Oil.

Colombia is the second largest producer of ethanol in Latin America after Brazil and expects to more than double ethanol output to 900 thousand tonnes a year by 2010. Colombia is likely to have a surplus of fuel ethanol for export during 2008.

The government is promoting a 60% increase in the country's palm area from 2005 levels with extra production going to biodiesel. Colombia's palm oil output is expected to reach 920,000 tonnes in 2008.

Sources:

FO Licht's World Ethanol & Biofuels Report: www.agra-net.com

USDA Foreign Agricultural Service: http://www.fas.usda.gov/gainfiles/200706/146291386.pdf