Jun 07, 2010
7% of Brazil's Soybeans Used for Biodiesel Production
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
As of January 1, 2010, the biodiesel standard in Brazil was set at B5 or a mixture of 5% vegetable oil with 95% petroleum diesel. Since 80% of the vegetable oil used to make biodiesel in Brazil is soybean oil, approximately 7% of Brazil's total soybean crop is now used to make the biodiesel blend. To make the B5 blend, approximately 3.6 million tons of soybeans are needed or the equivalent of the soybeans produced on 1.2 million hectares of soybeans out of a total soybean acreage in 2009-10 of 23 million hectares. In other terms, approximately one fourth of the soybean production in the state of Parana, which is the second leading producer in Brazil, is used for biodiesel production.
The second leading source of oil used in the blend is beef tallow which accounts for 10-12% of the total. Other oils such as castor bean oil, palm oil, canola, sunflower oil, pine nut oil, peanut oil, and cotton seed oil comprise the other 8-10% of the vegetable oils used.
Even though a significant amount of Brazil's soybean production is used for biodiesel production, it doesn't appear to have influenced the domestic price of soybeans in Brazil. The international markets are still the determining factor as far as soybean prices are concerned.
The Brazilian government has stepped up its efforts in recent years to diversify the source of vegetable oils used in biodiesel production. Petrobras has purchased a number of biodiesel production facilities and have built others in an effort to diversify the oil source. Their latest endeavor is a biodiesel production facility in Marialva, Parana that started operations last month. Once in full operation it has the capacity to supply 60% of the biodiesel used in the state of Parana.
Initially, the plant will use 600,000 tons of soybeans or the production from approximately 200,000 hectares of soybeans, but the plant was designed to use any number of different oils. Long range plans are to move always from soybean oil to canola oil, sunflower oil, or animal fats.
The biodiesel blend is expected to continue increasing by at least 1% per year or more.