Brazil’s biodiesel demand is projected to increase 5.6% to 10.3 million cubic metres in 2026, driven by higher diesel consumption and an increase in the mandatory blending rate, reported Quantum Commodity Intelligence, citing a report by broker StoneX.
Demand could rise further to 11 million cubic metres in 2027 if the government raises the biodiesel blending mandate to 16% (B16). However, if the current B15 mandate remains unchanged, consumption is expected to reach around 10.4 million cubic metres next year, the report said.
StoneX market intelligence analyst Isabela Garcia said the blending mandate would play a significant role in shaping demand. She noted that the projected growth in 2026 also reflects comparison with the previous period, when the B14 mandate was in force.
Brazil’s 2024 Fuel of the Future law provides for a gradual increase in the mandatory biodiesel blend by one percentage point annually, targeting B20 by 2030. However, a proposed increase from B15 to B16 this year was put on hold amid concerns over inflation.
Biodiesel prices have risen 7.3% since July, largely reflecting a 10% increase in soybean oil prices. Soybean oil accounts for approximately 85% of the feedstock used in biodiesel production, according to data from the National Agency of Petroleum, Natural Gas and Biofuels (ANP) cited by StoneX.
On the supply side, StoneX does not expect production constraints to limit market growth. Brazil’s biodiesel production capacity is projected to increase to 55,920 cubic metres per day in 2027, from 51,800 cubic metres per day in 2026. Average idle capacity is expected to remain around 40%, indicating sufficient scope to meet higher demand.
