The project also creates a traceability system for all diesel cycle fuels to help ensuring the quality of the fuels

18/03/2024 (Fastmarket) - The Brazilian Chamber of Deputies approved late Wednesday the Fuels of the Future proposal that increases the rate of mandatory blending of biodiesel in diesel.

The approved text, which now goes before the Senate for approval, mandates blending percentages of biodiesel in diesel of 15% in 2025, rising by 1 percentage point a year until it reaches 20% in 2030. Currently, the biodiesel blending rate is 14%.

Initially, the rapporteur of the bill, Arnaldo Jardim, had proposed the National Energy Policy Council (CNPE) might reduce or increase the mandatory blending by up to two percentage points “for a justified reason of public interest”.

Instead, the version approved by the Chamber sets a floor of 13% in the blending as a possibility at any moment if the sector cannot reach the established percentages.

“We had a conversation with the government and we understand that there may be problems, for example, with soybean production”, Jardim said in a statement by the Agricultural Parliamentary Front – Brazil’s congressional farm lobby – on the project.

Biofuel quality

The National Energy Policy Council will be responsible for setting the mandatory percentage of biodiesel blending within the limits of 13% and 25%.

Brazil can establish a rate higher than 15% next year “as long as its technical feasibility is verified,” according to the bill.

The project creates a traceability system for all diesel cycle fuels, recording transactions in the production chain with the purpose of “ensuring the quality of these fuels.”

It also allows the voluntary addition of biodiesel in diesel at a percentage higher than the mandatory rate as well as the voluntary use of biodiesel blending in several forms of transport and agricultural machinery, with the interested party required to communicate its use to the National Agency for Petroleum, Natural Gas and Biofuels (ANP).

Energy transition

Bodies in the biodiesel sector welcomed the approval by the Chamber.

“The project is fundamental to boosting the biofuels sector, especially biodiesel, placing Brazil at the forefront of the energy transition”, the Brazilian Union of Biodiesel and Biokerosene (Ubrabio) said.

The project stimulates innovation and diversification of the national energy matrix at the same time that it “strengthens the country’s energy security and encourages the creation of jobs and income generation in strategic segments of the economy,” the Brazilian Association of Vegetable Oil Industries (Abiove) said.

Fuels of the Future “will move the engine of Brazilian neo-industrialization” with legal certainty and predictability, the Association of Biofuel Producers of Brazil (Aprobio) also said.

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https://www.fastmarkets.com/insights/brazil-approves-proposal-to-raise-biodiesel-mandate/