29/01/26
Brazil market split on foreign biodiesel ban
Brazil market split on foreign biodiesel ban
Sao Paulo, 29 January (Argus) — A growing number of Brazilian fuel importers are
arguing that ending a current ban on biodiesel imports could spur competition
for the fuel. Since December 2023 only domestically produced biodiesel has been
allowed for meeting Brazil's biofuel blending mandate. An cross-industry group
led by the mines and energy ministry (MME) has been studying the role for
imports, but the group has not yet made any recommendations. Even without the
ban, imported biodiesel would not be profitable in Brazil, even from neighboring
Argentina and Paraguay, which have ample production capacity. The Argus
indicator for certified biodiesel in Argentina for the European market closed at
$1,129/m³ on a fob Rosario basis on 28 January, while the price in Paraguay
approached $1,177/m³ fob, according to information from domestic producers.
Those imported prices remain above Brazilian domestic contracts in border
regions. The weekly contract indicator for the Parana-Santa Catarina region was
close to $1,030/m³, while reaching $1,010/m³ in Rio Grande do Sul state in the
week ending 23 January. Prices in Araucaria, in Parana state, in the spot market
reached $1,007/m³ on 28 January. But opening the tap to imports could increase
the competitiveness of biodiesel in Brazil's domestic market, according to the
association of fuel importers Abicom and energy industry chamber institute of
oil and gas IBP. Even though foreign biodiesel does not have a competitive
advantage over Brazilian product, an import ban implies the absence of a basis
for challenging the prices charged by domestic producers, Abicom's chief
executive Sergio Araujo said. Imports can also mitigate risks associated with
the seasonality of feedstocks, production plant shutdowns, climatic events and
logistical restrictions, according to Araujo. But producers are against the
measure lifting the import ban, arguing that it could discourage new investments
in the industry, compromise the sector's predictability and create unequal
competitive conditions. Biodiesel imports also do not guarantee product quality,
a widely discussed issue in the domestic market, said Jeronimo Goergen,
president of biofuel producers association Aprobio. Authorizing biodiesel
imports could also increase domestic production facilities' downtime, the
producers argue. Brazil produced 8.9mn m³ (168,378 b/d) of biodiesel in
January-November 2025, according to data from hydrocarbons regulator ANP, and
2026 consumption is expected to reach 10.49mn m³, according to state-owned
energy research company EPE — both well below the country's production capacity
of almost 16mn m³. Producers also worry that biodiesel imports may increase the
amount of fraud in the blending market. Reports of diesel failing to meet
specifications for biodiesel content rose by almost 34pc in 2025 from the
previous year to 292, according to preliminary data from the ANP. Both Argentina
and Paraguay have excess biodiesel production capacity. Argentina has installed
biodiesel production capacity of 3.9mn m³/yr, but utilization rates reached only
13pc in the first half of 2025, according to the Rosario stock exchange.
Installed capacity is almost 252,000 m³/yr in Paraguay, where utilization rates
reached 35pc in 2024, according to the center for economic studies of the
industrial union of Paraguay. Data for 2025 has not been released. The MME has
not provided a timeline for the review it is leading on the imports issue. By
Natalia Dalle Cort Send comments and request more information at
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