Researchers collect the fruits of oil palm trees at the Agropalma Group facility in Tailandia, Para, Brazil, 2006. Agropalma produces
biodiesel from the fruit of the oil palm trees called that is called palm diesel.

05/05/2012 (Bloomberg) - Brazilian biodiesel producers are seeking export agreements with Spanish oil companies after the European country moved to cut off imports of the renewable fuel from Argentina.

Erasmo Carlos Battistella, president of the biofuel trade group Associacao dos Produtores de Biodiesel do Brasil, will discuss the issue at a meeting today with Spain’s ambassador in Brasilia.

Spain is cutting trade ties with Argentina after the South American country said it would seize control of YPF SA (YPFD) from the Spanish energy company Repsol YPF SA. (REP) That’s creating a market for Brazil’s biofuels industry, Battistella said.

“It’s opened up a major export opportunity” for Brazilian producers, he said in a telephone interview today. “Argentina was a big supplier there.” He expects trade contracts to be signed within three months.

Spain revised an incentive program last month to exclude biofuels produced outside Europe from meeting government requirements for using renewable fuel. That effectively blocked imports from Argentina and other nations in the region. Battistella will ask that Brazil be included on the list of approved suppliers.

Brazil’s biodiesel plants have annual production capacity of 6.94 billion liters (1.83 billion gallons). Of that, 15 factories with 4.59 billion liters of capacity have been approved for exports, Battistella said. Spain purchased 1.87 billion liters of biodiesel from Argentina in 2011.