Brazil’s biofuel producers and distributors are uncertain about meeting the upcoming deadline to raise the mandatory biodiesel blend in diesel, according to UkrAgroConsult.
The increase from the current 15% blend to 16% (B16), scheduled to take effect in March under the Fuel of the Future law, still requires feasibility tests to confirm safety and performance, along with final approval from the National Energy Policy Council (CNPE).
Industry participants widely believe the March target is unlikely to be met. A source from a major biodiesel producer described the chances of implementing the higher blend next month as “very remote,” suggesting the rollout may instead occur in the early second half of the year. A similar delay occurred in 2025 when the blend rose from 14% to 15% only in August after missing the March deadline.
Some market players also view Brazil’s presidential elections in October as a possible reason for further delays, noting that higher biodiesel blends could push up diesel prices and increase inflation risks ahead of the vote.
Distributors are already struggling to pass higher costs on to consumers as diesel demand remains weak at the start of 2026 and the soybean harvest — a key biodiesel feedstock — has yet to reach its peak. One analyst indicated the increase may not happen this year, pointing out that more than 70% of biodiesel is produced from soybean oil, which can affect pricing.
Analysts at S&P Global also questioned whether the government would proceed with a higher mandate in 2026, warning that blending decisions are often shaped by political considerations rather than technical factors. Their research assumes the B15 blend will remain in place throughout the year and forecasts supply exceeding 11 million cubic meters, a potential record.
Despite these concerns, some officials remain confident the timeline can be maintained. Federal deputy Alceu Moreira, president of the FPBio biodiesel caucus in Congress, said an election year makes it even more important for the government to implement environmentally beneficial policies.
“There is no reason not to increase the blend in March,” Moreira said, adding that efforts would continue to keep the schedule on track.
However, government officials have indicated that feasibility studies still require field testing and updates to meet anti-pollution rules, making the March deadline highly challenging.
Biofuels producers’ association Aprobio has urged the Ministry of Mines and Energy to follow the Fuel of the Future law and speed up testing for B16, with further discussions expected soon.
Aprobio president Jerônimo Goergen warned that adhering to the current timetable could lead to delays, as feasibility test reports are expected only by July or August 2026 and could be pushed to January 2027 if additional technical or regulatory adjustments are needed.
There is currently no official confirmation that the testing schedule has been finalized or begun, raising the possibility of further setbacks.
If the increase is postponed, Aprobio expects an immediate economic impact on producers who had anticipated stronger biodiesel sales. However, the association does not foresee widespread cancellations of expansion plans or soybean crushing projects already announced, though some new projects may face delays.
The group maintains that biodiesel should be embraced by Brazil’s agribusiness as a value-added product and considers higher blending mandates essential for the sector’s growth. It also sees opportunities in international markets, including hydrotreated vegetable oil (HVO), sustainable aviation fuel (SAF), and other alternatives.
