The heating of the Brazilian soy export market, the main raw material for the production of biodiesel in the country, caused the federal government to determine the reduction of the percentage of mandatory blending of this biofuel in the diesel oil formula. Thus, in September and October, instead of 12% biodiesel in the composition, the blend content is now reduced to 10%.
The issue directly reflects in Rio Grande do Sul state, the largest producer of biofuel in Brazil, both in authorized capacity, with 30% of the total, and in effective production, with 27%, according to data from last year from the National Oil, Gas Agency Natural and Biofuels (ANP).
The Minister of Mines and Energy, reported that an imbalance in the supply of biodiesel has currently been detected in relation to the demand expected for the next two months and there would not be enough volume to meet the mandatory percentage initially stipulated. It is not the first time that the federal government has made this decision, the same determination was adopted from June 16 to 21 this year. Currently 51 plants authorized by the ANP to produce biodiesel, a market that has evolved and reached maturity, must produce around 7 billion liters of biofuel this year and the perspective is to move to around 10 billion liters in 2023, when B15 is stipulated (15% of biodiesel addition in diesel oil ).
Regarding the reduction of the mandatory percentage in the next two months, the president of the Brazilian Union of Biodiesel and Biokerosene (Ubrabio), Juan Diego Ferrés, argues that the biofuels sector is experiencing a sensitive moment. The offer has been penalized by an increase in the cost that results from the excessive export of raw material. He admits that exports are beneficial to Brazil's economy, however, exaggerated, according to him, can be harmful to other markets.
Global imbalance prevents soy from being kept in sufficient quantity, at a viable cost for the biofuel and crushing industries.
The Association of Biofuels Producers of Brazil (Aprobio), through a note, states that it received with dismay the information published in the press that the federal government, through the Ministry of Mines and Energy, decided during the period of realization of the 75th Public Biodiesel Auction, still in progress, to reduce the minimum mixture from 12% to 10% during the months of next September and October, months for which the current auction should attend.
According to Aprobio, at least two months ago, producers warned the government that it would be essential to provide a form of financing that could guarantee the maintenance of a strategic stock of raw material in the country to meet local demand in the second half of the year and only for the biodiesel sector, similar requirement for the meat segment (beef, poultry and pork) however, was ignored.