Feb 06, 2023

Biodiesel Producers in Brazil Push for Higher Blend Percentage

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Representatives of the biodiesel sector in Brazil met last Friday with Brazil's vice president, Geraldo Alekmin, urging him to pressure CNPE (the National Energy Policy Council) to make a final decision concerning the percentage of vegetable oil that will be blended into biodiesel. The current blend percentage is 10% (B10) and it is scheduled to go to 15% (B15) in March if CNPE agrees.

Biodiesel producers say a decision is urgently needed to give time for the sector to plan the volume of soybeans they need to process to produce soybean oil which account for 65.7% of the vegetable oil used in biodiesel.

The industry has been fighting for this increase for several years. The prior administration reduced the blend from 12% to 10% in in 2021 due to a disappointing soybean crop and near record high prices for soybean oil. Brazil's biofuel program called for a B12 mixture in 2021, a B14 mixture in 2022 and B15 in 2023. From that point forward, it was scheduled to increase on a yearly basis.

Based on that schedule, crushers expanded their operations in anticipation of the higher blends and were bitterly disappointed when the blend was lowered instead of increased. The biodiesel producers contend they have the current capacity to meet a B20 blend.