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.
