The Brazilian government has announced that the country’s biodiesel blending mandate would be raised from the current 10% level (B10) to 12% (B12) from April, AgriCensus reported.
In addition, the country’s national energy policy committee CNPE announced there would be a progressive ramp up in mandates scheduled to reach 15% (B15) by 2026, the 17 March report said.
The move was welcomed by the biodiesel sector, AgriCensus wrote.
“This initiative brings juridical predictability for the biodiesel sector to intensify its investments and puts Brazil in the pathway to lead global diesel decarbonisation efforts,” the Brazilian Association of Vegetable Oil Industries (ABIOVE) was quoted as saying in a note immediately after the announcement on 17 March.
Although the increased blending mandate was broadly in line with industry expectations, the announced ramp-up schedule was more cautious than the country’s biodiesel sector had been pushing for, the report said.
ABIOVE - along with Brazil’s biofuels producers’ association (Aprobio), Brazil’s union of biodiesel and biokerosene (Ubrabio) and the national union of household agriculture and solidarity-based economy (Unicafes) - had told AgriCensus at the end of February that the sector believed B15 could be reached by March 2024.
The announcement would increase domestic demand for biodiesel and upstream products, particularly soyabean oil, which accounts for about 70% of the feedstocks used to produce biodiesel in Brazil, according to the report.
Brazil’s biodiesel blending mandate had reached a maximum of B13 and was scheduled to reach B15 in March this year. However, it was reduced to B10 in 2021 in a government bid to control domestic inflation and had remained at that level since, the report said.
According to estimates ABIOVE shared with AgriCensus earlier this year, the move to B12 would increase Brazil’s soyabean oil demand from the biodiesel sector by about 800,000 tonnes/year.
Brazil’s 2022/23 soyabean crush has been estimated at 52.7M tonnes by the country’s food agency Conab’s latest update, with soyabean oil and soyabean meal output forecast at 40.4M tonnes and 10.8M tonnes, respectively.