Brazil's National Energy Policy Council (CNPE) has approved a reduction in the minimum biofuel content in diesel fuel to 10% from 13% previously.
The council cited a jump in prices of soy, a key ingredient in Brazilian biodiesel, Reuters reported.
Rising energy and commodity prices have stoked inflation in Brazil, forcing aggressive interest rate increases and adding to concerns about an economic recovery.
In July, 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.
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