Detail

Brazil

Biofuels

Biodiesel

01/03/2018

Renewable energy

Biofuel policy

Raised the nationwide mandatory blending rate for biodiesel from 8 percent to 10 percent, a shift expected to raise Brazil’s annual biodiesel consumption by almost 30 percent. Also confirmed plans to increase the country’s mandatory blending rate further in the coming years.

Following recommendations made by Brazil’s National Energy Policy Council (CNPE), the Government raised the nationwide mandatory blending rate for biodiesel from 8 percent to 10 percent (see also MPPU Dec.’17). From 1 March 2018, all petroleum diesel is required to include 10 percent of vegetable oil-based diesel. While biodiesel manufacturers can use any vegetable oil as feedstock, the share of soybean oil in total feedstock uptake remains capped at 80 percent. Furthermore, one-fifth of all feedstock must be sourced from small family farms. The higher mandate is estimated to raise Brazil’s annual biodiesel consumption by almost 30 percent – from 3.8 million to 4.9 million tonnes, according to industry estimates. During 2018, the biofuel industry’s uptake of soybean oil is forecast at 3.7 million tonnes, which compares to 2.9 million tonnes in 2017. Accordingly, domestic soybean crush related to biodiesel would rise from 14.5 million to 18.5 million tonnes. Reportedly, for 2019 and beyond, further increases in the country’s mandatory blending rate are envisaged, conditional upon positive test results on motor engines. The industry’s current blending capacity is reported to be around 7 million tonnes per year, which would be compatible with higher blending rates.