Brazil to speed up increases in biodiesel mandate, set 14% from March 2024

Brazil will accelerate the pace of increases in its biodiesel mandate – the required share of biodiesel in the diesel mixture – with a 14% blending (B14) valid from March, Brazil’s Minister of Mines and Energy, Alexandre Silveira, announced Tuesday after a meeting of the National Energy Policy Council.

The official schedule previously indicated that the blending mandate, which is currently set at 12% (B12), would rise to 13% in March.

The government also proposed an increase to a 15% mandate (B15) by March 2025, above the 14% projected in the previous schedule.

“Today we have expanded the participation of biodiesel even further in our matrix," Silveira said, in an audio sent by the ministry's press office.

"This reduces our dependency on importing diesel oil, it helps to decarbonize, as ANP (Brazilian National Agency for Petroleum, Natural Gas and Biofuels) has been making great progress in certifying the quality of biofuel products approved in Brazil and it will stimulate national agriculture," the minister added.

Soyoil composes about 70% of the feedstock used to produce biodiesel in Brazil and industry sources estimate each percentage point of increase in the biodiesel mandate represents an additional demand of over 400,000 mt per year of soyoil.

According to Brazil’s vegetable oils association, Abiove, the country could even meet a B15 mandate as early as in 2024.

“Brazil has soyoil availability to meet the growing demand for biodiesel production – the industry is prepared,” Abiove told Agricensus.

Abiove’s latest estimates released on December 12 had pegged Brazil’s 2023/24 soybean crush at 54.5 million mt with soyoil and soymeal output at 11 and 41.7 million mt, respectively, and will likely upgrade these figures in January.

The possibility to import biodiesel was also suspended and a working group was established to evaluate the impacts allowing those imports could have.

“Until the working group completes its mission, we left imports as they are today, that is, Brazil continues to defend local content and national biodiesel,” the minister said.

In November, the Board of Directors of ANP approved a resolution regulating the import of biodiesel for use in mandatory blending, but the three associations that represent the sector in Brazil – Abiove, the Association of Biofuel Producers of Brazil (Aprobio) and the Brazilian Union of Biodiesel and Biokerosene (Ubrabio) – positioned themselves against it.

In a statement Tuesday, Ubrabio welcomed the increase in the biodiesel mandate from the current 12% to 14% in March 2024 and 15% in March 2025.

“The increase in the blending of biodiesel in fossil fuel shows that the federal government has confirmed its commitment to the energy transition and decarbonization, providing the necessary impetus for the industry to return to the path of competitiveness and the space lost in recent years,” Ubrabio said.

Ubrabio also celebrated the decision to suspend imports of biodiesel and discuss the issue in-depth in the working group “at a time when the industry is trying to recover from a difficult scenario, with around 50% of capacity idle.”

Aprobio said that the increase in the blending of biodiesel in diesel defines a clearer horizon of predictability and legal security for the sector to resume investments and accelerate the process of decarbonization of transport in Brazil

“The increase in the biodiesel blend from 12 to 14% (B14) in March next year and to B15 in 2025 is an advance desired by the sector, which is ready to meet the new demand with the current installed capacity,” Francisco Turra, president of the board of directors of the association, said in a note.

The president of the Mixed Biodiesel Parliamentary Front in the National Congress (FPBio), Alceu Moreira, also praised the decision to bring forward the increase in biodiesel blending.

“It allows the sector to have production predictability and the possibility of organizing investments and business”, Moreira said, in a statement, adding that not allowing biodiesel imports was “an absolutely correct decision in the country’s interests.”