Paraguay's industry and commerce ministry (MIC) has cut the country's mandatory biodiesel blend back to 7pc, reversing course four days after an 8pc mandate entered into force.
Under a resolution published on Friday, the minimum biodiesel blend in diesel will be set at 7pc from 24 July through 31 December 2026, although the MIC said compliance checks will not begin for 60 days. The mandate will rise to a minimum of 8pc from 1 January 2027.
The ministry said the change follows assessments of "new factors and studies" and aims to balance economic, quality and environmental considerations.
The latest resolution represents a compromise between the government's biofuels objectives and concerns raised by downstream fuel suppliers.
Fuel distributors and blenders have been arguing for weeks that most vehicle manufacturers represented in Paraguay's fleet do not recommend biodiesel blends above 7pc.
The MIC's previous resolution increasing the mandatory blend to 8pc came into force on 20 July and was anchored in a broader strategy to displace imported fuels with domestically produced biofuels while also stimulating the local vegetable oils and biofuels industry.
Fuel retailers and blenders said they repeatedly met with MIC officials before the June decision and warned that higher blend rates could pose technical risks for part of the country's diesel fleet. They said those concerns were largely disregarded after MIC decided on the 8pc minimum blend.
Distributors have argued that increasing the blend above 7pc could raise the risk of engine and fuel system damage in vehicles that were not designed or certified for higher biodiesel concentrations. Higher blends could also increase maintenance costs by requiring more frequent replacement of components such as fuel filters, they said.
