AreaBrazil
Commodity GroupBiofuels
CommodityBiodiesel
Date01/03/2018
Policy CategoryRenewable energy
Policy InstrumentBiofuel policy
DescriptionRaised the nationwide mandatory blending rate for biodiesel from 8 percent to 10 percent, a shift expected to raise Brazils annual biodiesel consumption by almost 30 percent. Also confirmed plans to increase the countrys mandatory blending rate further in the coming years.
NotesFollowing recommendations made by Brazils 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 Brazils annual biodiesel consumption by almost 30 percent from 3.8 million to 4.9 million tonnes, according to industry estimates. During 2018, the biofuel industrys 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 countrys mandatory blending rate are envisaged, conditional upon positive test results on motor engines. The industrys current blending capacity is reported to be around 7 million tonnes per year, which would be compatible with higher blending rates.