Brazil's national energy policy council CNPE will bring forward the biodiesel blending mandate to 14pc from the current 12pc as of March and suspended biodiesel imports originally scheduled to begin on 2 January.
The blending rate will then rise to 15pc in March 2025. According to the previous schedule defined in March by the government, the blend was to increase to 13pc in 2024 and to 15pc in 2026.
The proposal tends to demands from the production sector, which is struggling with high idle biodiesel capacity. Brazilian producers celebrated the decision and said that the measure creates a safe environment for investments.
CNPE also approved the temporary suspension of biodiesel imports, reversing oil regulator ANP's decision published earlier this month. Brazil's biodiesel congressional caucus FPBio was working to cancel that decision.
"This measure was a victory for biofuels in Brazil," mines and energy minister Alexandre Silveira said. "We also decided that it is essential to create a working group to study the impacts of imports. Until this group completes its mission, Brazil will continue to defend domestic output."
President Luiz Inacio Lula da Silva joined the CNPE meeting for the second time this year. Lula has made it clear that the country needs to find a solution to keep the price of fuel and electricity in a position to boost the economy, generating jobs and income, the minister said.
The mandate increase encourages biodiesel production, reduces dependence on diesel imports and increases national energy security, Brazil's vegetable oil industries association Abiove said. It expects Brazil's biodiesel production will reach 8.9bn l (154,350 b/d) in 2024.
"The decision strengthens family farming," Aprobio's board of directors president Francisco Turra said. "The sector can continue to move forward with more investments and accelerate the process of decarbonization of transport."
Biodiesel producer Be8's president Erasmo Battistella said that CNPE's measure "puts biodiesel on track by returning the market predictability the sector so desired."
Brazil's petroleum institute IBP — which represents fuel retailers — said the energy council's decisions "compromise regulatory stability."
The council — comprised of 16 ministries — can veto planned increases, as was the case during the mandate of former president Jair Bolsonaro. His administration reversed a blending hike when biodiesel outpriced its fossil fuel counterpart by a large margin in 2021.
| Brazil's biodiesel production | |
| bn l | |
| Year | |
| 2022 | 6.3 |
| 2023* | 7.3 |
| 2024* | 8.9 |
| 2025* | 10.1 |
| Abiove | |
| *Expected production | |
