The Brazilian government that mandated the percentage of vegetable oil blended into Brazil’s biodiesel be reduced from 13% (B13) to 10% (B10) has now reconsidered that position and indicated the mixture will be increased to 12% (B12) for the months of September and October.
The government justified the reduction due to the high prices for soybean oil which makes up more than 70% of the vegetable oil used in Brazil’s biodiesel. When the blend percentage was reduced, the Brazilian Association of Vegetable Oil Industries (Abiove) complained that there was little justification for the reduction since the price of soybean oil is a minor component compared to petroleum diesel in the price of biodiesel.
Abiove indicated that when the blend was abruptly reduced, it threw the sector into uncertainty since they had been investing in expanding their production capacity expecting an ever-increasing blend percentage, which is what had been promised by the government.
Even though the new blend is less than the B13 which had been in place, Abiove views this as a move in the right direction for the industry.
The industry is pushing to increase the blend back to B13 for November and December and then B14 in March of 2022 and B15 by the end of next year.
The industry has ample capacity to meet even higher blends and Brazil’s soybean production continues to increase annually.
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