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Voluntary biodiesel use furthers Brazil climate goals

Voluntary biodiesel use furthers Brazil climate goals

Sao Paulo, 9 October (Argus) — Voluntary use of biodiesel in Brazil above its 15pc mandate is broadening across sectors, highlighting diverse approaches to decarbonization and energy security amid intensifying global conflicts. The pending implementation of a regulated carbon market in Brazil means companies will need to reduce or offset greenhouse gas emissions. To meet those obligations, many are expanding their use of biofuels alongside the purchase of carbon credits. Biofuel use could also gain ground as an alternative to petroleum-based diesel, especially during price spikes driven by geopolitical conflicts such as the Mideast Gulf conflict and the Russian war in Ukraine, market participants from biofuel companies and industries say. Biodiesel is typically more expensive than diesel in Brazil, but that relationship can flip during periods of global tension. Between 2 March, the first trading day after the start of the US-Iran war, and 6 October, the price of S10 diesel at the southern port of Paranagua, in Parana state, reached R7,402($1,480)/m³, the highest level since the 2020 start of Argus' historical series. Biodiesel in the same period was quoted at R5,434/m³ in the spot market in Araucaria, also in Parana. Companies have also begun to pay greater attention to energy security in light of recurring international crises and supply risks. Brazil imports between 20-25pc of its diesel demand, leaving it exposed to foreign market conditions. In this context, biofuels are gaining importance not only as a decarbonization tool but also as an alternative to reduce reliance on imported fuels and bolster energy security. This concern has been reinforced by recent events highlighting the vulnerability of global supply chains. Russia, one of the world's leading diesel exporters and historically a major supplier to Brazil, went so far as to restrict overseas shipments to safeguard its domestic market during the war in Ukraine. In the US, statements by President Donald Trump regarding potential limits on fuel exports have also fueled fears of a tightening in global supply. "Companies need to analyze the magnitude of the risk associated with not having the product [diesel]" in hand, said Daniel Furlan Amaral, regulatory affairs director at the Brazilian vegetable oil industry association Abiove. "This will become a component of companies' risk matrices." Industries from mining to consumer goods test higher blends Brazilian mining giant Vale is among the firms testing higher biodiesel blends. In Mariana, in southeast Minas Gerais state, the company uses 30–50pc biodiesel blends in part of its truck fleet, which has a capacity of up to 190 tonnes (t). Vale sees biodiesel use, once performance parameters are validated, as having the potential to generate meaningful environmental gains and serve as a benchmark for large-scale adoption across the sector. The miner is also investing in solutions such as ethanol and battery-electric trucks. A Brazilian-based subsidiary of German auto giant Mercedes-Benz is also testing diesel with a 30pc biodiesel blend in its vehicles. According to the automaker, the trials assess component durability and equipment performance under long-term operating conditions. Besides Mercedes-Benz, state-controlled Petrobras is running tests with 20–25pc blends to evaluate the potential for emissions reductions, while rail operator Rumo uses a 16pc blend in part of its rail fleet. There are also cases of pure biodiesel use in specific applications. Mercedes-Benz reported positive results with the fuel during the Rota Sustentavel COP30 initiative, carried out in partnership with Brazilian biofuel producer Be8. In the initiative, a truck traveled about 4,000km between Passo Fundo, in the southern state of Rio Grande do Sul, and Belem, in the northern state of Para, cutting greenhouse gas emissions by about 99pc, according to researchers from the Instituto Maua de Tecnologia. Among other firms evaluating biodiesel use are consumer goods giant Unilever, which uses pure biodiesel in boilers; maritime logistics firm Wilson Sons Servicos Maritimos, in waterborne operations; and power plant Energetica Suape II, in thermoelectric generation engines. Be8 and other biodiesel producers, such as Amaggi, Potencial, Binatural and Oleoplan, are also conducting evaluations with blends above the mandatory level. Regulatory shift eases voluntary blending Hydrocarbons regulator ANP is revising the rules for voluntary biodiesel use above the mandatory 15pc blend. Previously, companies needed prior authorization from the agency. With a provisional procedure now in effect, companies only need to notify the agency of their use. The regulator has been aligning its rules with Brazil's Fuel of the Future law to streamline procedures and provide legal certainty for the adoption of these alternatives. Replacing prior authorization with a notification model had long been sought by the industry, according to Abiove. According to Amaral, the process required approvals from different agencies — including the Brazilian environment and renewable natural resources institute Ibama — and could take more than six months to complete. "All these requirements discouraged interest" in the past, Amaral said. By Natalia Dalle Cort Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.