Spain's government announced Friday it will restrict imports of Argentine biodiesel in protest at Buenos Aires' expropriation of oil group Repsol's YPF subsidiary.
Madrid says it will favour domestic or European biodiesel -- diesel made from vegetable oil or animal fat -- over oil from other nations that export to Spain, principally Argentina.
"This action will allow us to support the refinery operations of Spanish and European business," Deputy Prime Minister Soraya Saenz de Santamaria told a news conference after a cabinet meeting.
She gave few details of the ministerial order, which will introduce a series of "equivalency" measures to help refiners based in Europe. It is to be published in the official government bulletin on Saturday.
Argentine President Cristina Kirchner announced Monday she was presenting legislation to parliament that would nationalise Spanish oil group Repsol's subsidiary YPF.
Infuriated, Madrid vowed to retaliate.
Spain imported 2.096 billion euros ($2.8 billion) of products from Argentina last year of which 706 million euros were biofuels, according to Spanish trade figures.
In turn, Spain exported only 1.003 billion euros worth of goods to Argentina.
Spain's biodiesel industry complains that unfairly priced imports from Argentina force it to leave much of its capacity idle because it is unable to compete.
The Spanish government praised the European Parliament for backing a resolution deploring Argentina's "unilateral and abritrary" decision to nationalize YPF.
"I want to thank the parliamentary groups for their support," Saenz de Santamaria said.
"The government will continue to seek diplomatic measures and actions through all forums because it is our duty to defend the interests of Spaniards, of whom many are small shareholders in this company," she said.