Brazil's mines and energy ministry has ruled out raising the biodiesel blend before feasibility tests are completed, amid increased lobbying for a higher mandate as oil prices rise on the US-Iran war.
Market participants had expected Brazil's national energy policy council (CNPE) meeting — originally scheduled for yesterday and postponed to 19 March — to include a biodiesel blend increase on the agenda. But the mines and energy ministry told Argus that tests on blends ranging from 16pc to 25pc remain in the final phase of methodological consolidation and experimental activities have not yet started.
Without tests proving the new blend levels are technically feasible, the law does not allow the mandatory blend increase schedule to move forward, the ministry said. Brazil's fuels of the future law projected an increase in the blending mandate to 16pc from the current 15pc this month.
The ministry expects to start experimental trials in the first half of 2026. The original schedule planned for the tests to be completed in June, with final validation in August.
Brazilian hydrocarbons regulator ANP today approved a draft ordinance establishing guidelines for its participation in one of the projects that will test biofuels blends.
Brazil's parliamentary front for biodiesel FPBio has intensified lobbying to increase the biodiesel blend to 17pc from 15pc, calling it a "strategic measure for energy sovereignty, economic stability and the protection of Brazilian consumers".
Brazil can currently supply up to a 21.6pc biodiesel blend into diesel, industry associations Abiove and Aprobio said in a joint statement supporting the increase.
Prices for imported 10ppm (S10) diesel at Brazilian ports surpassed biodiesel contract prices on 6 March for the first time since October 2023, as global oil derivative prices rose on the US-Iran war.
The government announced on 12 March measures to eliminate the federal VAT-like PIS/Cofins tax levy on diesel imports and sales to mitigate the impact of the Iran war on oil prices.
Market participants also expect the CNPE meeting to address the authorization of biodiesel imports, but there is no official confirmation on the subject.
Ethanol market participants have also speculated a rise in the mandatory ethanol blend in gasoline to 32pc from 30pc, but there are no official timelines set in the Fuels of the Future law for this change.
The mines and energy ministry said it continuously monitors the international energy scenario and its potential effects on the domestic fuel market.
