Brazil is well-positioned to become one of the leading suppliers of biodiesel to the global maritime sector, supported by competitive costs, ample availability of raw materials and idle production capacity.
Brazilian biofuel still faces barriers to meeting part of the international demand driven by European regulations, but progress in discussions at the International Maritime Organization (IMO) concerning the decarbonization of maritime transport could expand the market for biodiesel made from soybean oil and other feedstocks produced in Brazil.
Prices for Brazilian biodiesel — traded both on the spot market and via contracts for delivery at the Port of Paranaguá in the southern state of Paraná — averaged $1,065/m³ and $1,016/m³, respectively, over the last 12 months, based on Argus indicators. European biodiesel originating in the Netherlands, adjusted to the same basis of comparison, recorded an average price of $1,146/m³.
Brazil's current biodiesel production capacity is 15.8mn m³/y (272,700 b/d), assuming continuous plant operations. Actual production, however, is approximately 10mn m³/y, indicating idle capacity of around 37pc, according to data from hydrocarbons regulator ANP.
State-controlled Petrobras and Raizen have both received ANP approvals to market their own blend of very low-sulfur fuel oil (VLSFO) containing a minimum of 24pc biodiesel (B24). Currently, only Petrobras markets B24 at Brazilian ports.
Brazilian biodiesel's ability to gain a foothold in the international bunker market depends on demand, which is constrained by regulatory factors. The main drivers of alternative fuel consumption in the bunker market are European regulations, which limit the eligibility of fuels derived from food or forage crops.
The EU's RED III directive — which aims to increase renewable energy consumption in the transportation sector to 29pc of total consumption by 2030 — classifies soybeans as a feedstock with a high risk of indirect land-use change. The classification is based on higher emissions in the "well-to-wheel" cycle, which takes into consideration the total CO2 released into the atmosphere from production through the fuel combustion phase. For this reason, RED III prioritizes biodiesel made from waste feedstocks and advanced routes, such as product made from used cooking oil (UCO), agricultural waste, or industrial waste.
The EU's specific regulation to reduce greenhouse gas emissions from the maritime sector, FuelEU Maritime, uses the sustainability criteria defined by RED III and also favors advanced fuels and feedstocks with a lower climate impact.
In December, the IMO could approve a regulatory package that supports the decarbonization of maritime transport in international waters by 2050.
The potential approval of the so-called Net-Zero Framework could open a new avenue for Brazilian biodiesel in the maritime market. The proposal aims to establish a standard for fuel emissions intensity and an economic mechanism linked to ship emissions, with progressive reduction targets through 2050. Depending on the criteria adopted for life-cycle assessment, traceability and indirect emissions, soybean oil biodiesel could come to be counted as a lower-carbon alternative.
The change could put Brazil in a more competitive position as a supplier of lower-emission marine fuels. It could also help unlock demand for biodiesel from various feedstocks starting in 2028 — the potential effective date of the new IMO requirements — which could reshape consumption decisions in the maritime sector.
In parallel with international regulatory advances, Brazil is moving toward regulating biobunker in national waters. In late July, the ANP launched a public consultation to revise the specifications for marine fuels, aligning Brazilian rules with the IMO's most recent decarbonization targets. The proposal recognizes biodiesel, hydrotreated vegetable oil (HVO) and synthetic fuels as drop-in alternatives, which can be used without modifications to engines or refueling infrastructure.
Tests with drop-in fuels have already been conducted with special authorization from the ANP since 2025. Efen — a joint venture between Prumo Logistica and BP — conducted a debunkering operation using HVO at the port of Acu, in the southeastern state of Rio de Janeiro. Local renewable energy firm Be8 tested BeVant, the biofuel produced by the company, in Sao Francisco do Sul, in the southern state of Santa Catarina, and in water in Rio Grande do Sul, also in Brazil's southern region. This year, Denmark's Bunker One also conducted tests with ethanol at Santos port, in the southeastern state of Sao Paulo.
