The new government of Brazil has indicated that it plans to ramp up the country’s biodiesel schedule – signalling a return to original proposals – in a move likely to lead to higher blend requirements next year, sources told AgriCensus.

The biodiesel sector is a major outlet for soyabean oil, accounting for about 70% of the feedstocks used to produce biodiesel in Brazil, the 11 November report said.

According to sources in contact with members of the new government’s transition team, the goal was to increase the mandate to 14% (B14) from January to March, and to 15% (B15) from March.

The timetable followed the original schedule set out in 2018 by the National Energy Policy Council (CNPE) and would reverse a decision made by outgoing president Jair Bolsonaro, AgriCensus wrote.

Brazil’s biodiesel blend mandate was reduced from 13% to 10% in May 2021 and has remained at that level this year.

The move reinforced earlier indications, from ministers of Bolsonaro’s outgoing government, that the country would return to the original planned programme early next year, the report said.

However, there were market concerns about the feasibility of increasing mandates to B14 in January, AgriCensus wrote.

“I believe [B15 from March onwards] can be enforced without major issues, especially if we have a good 2022/23 soyabean crop,” Daniele Siqueira, senior market analyst for Brazil-based consultancy Agrural told AgriCensus.

“The big question is for January and February: Will it be B10 as it is now, B14 or B12, which would be a middle ground?” Siqueira added.

The vice president of the Brazilian Union of Biodiesel, Ubrabio, and president of the Oleoplan group, Irineu Boff, told AgriCensus that the sector expected a final decision soon.

“We have to know as soon as possible so that the industry can organise itself to supply the required volumes,” Boff said.

With Brazil’s soyabean production in the 2022/23 marketing year forecast at a record 153.5M tonnes, soyabean crushing was expected to reach 48.9M tonnes this year and increase to 51.4M tonnes in 2023, according to estimates by the country’s national food agency Conab.