Brazil’s National Energy Council has decided to maintain the mandatory biodiesel blend in diesel at 14% starting in March instead of increasing it to 15% as previously anticipated, according to Energy Minister Alexandre Silveira, reports Reuters.
The majority of Brazil’s biodiesel is produced from soybeans processed into soy oil.
Following the announcement, StoneX, an agribusiness consulting firm, cut its forecast for the annual increase in Brazilian biodiesel sales in half. A 15% blend would have resulted in a 1.2 million cubic meter (mcm) increase in biodiesel sales, reaching a total demand of 10.2 mcm in 2025. With the 14% blend now extended throughout 2025, the annual sales growth is projected at 600,000 cubic meters, with demand expected to reach 9.6 mcm, StoneX reported.
Minister Silveira told reporters that the 14% blend will remain in place “until further deliberation, which can be taken at any time.” He cited concerns about food prices as the reason for the decision, noting that the government has been sensitive to rising food costs, which have impacted President Luiz Inacio Lula da Silva’s approval ratings. “President Lula’s government has a big priority: feeding people fairly and minding food prices,” Silveira explained.
Abiove, a national oilseed lobby representing global soybean processors, stated that the decision to maintain the 14% blend was based on soybean oil prices for consumers. However, they pointed out that prices for both packaged soybean oil and biodiesel are already declining, reflecting the positive impact of this year’s record soybean harvest. Abiove expressed hope that the government will review its decision “as quickly as possible.”
