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The National Petroleum, Natural Gas and Biofuels Agency (ANP) denied late on Thursday, March 27, a request from Brazil’s National Union of Fuel and Lubricant Distribution Companies (Sindicom) to suspend the mandatory biodiesel blend in diesel for 90 days in the country. Brazil currently has a mandatory blend of biodiesel in diesel at 14% (B14), with the Fuels of the Future law requiring increases of 1 percentage point per year to reach 20% in March 2030.
Sindicom, which represents Brazil’s largest fuel distributors, had argued in its request presented on March 12, and seen by Fastmarkets, that the suspension of the mandatory blend was necessary for ANP to increase inspection and combat fraud in the sector.
ANP’s decision came over a week after the withdrawal of a proposal to allow gas stations and distributors to sell diesel without a blend of biodiesel. Marcos Pollon, congressman from the Liberal Party of Mato Grosso do Sul, requested the filing of the project eight days after proposing the bill in Brazil’s Chamber of Deputies, following the negative repercussions of the project in the agribusiness and biofuels sectors.
Sindicom’s request and the proposal in Congress came after the Brazilian government announced in February that it would not increase the biodiesel blending in diesel to 15% from March 1, leaving the mandate unchanged at 14% in an effort to control food price inflation.
In its decision, ANP said that eliminating the mandatory blending would require an increase in the supply of diesel A (pure diesel without biodiesel) by more than 2.4 million cubic meters in 2025 to replace the missing biodiesel content.
“Currently, even with the 14% biodiesel blend, Brazilian refineries are already not offering enough diesel A volumes to meet total domestic demand,” ANP added.
According to the agency, the share of imported diesel in Brazil’s domestic sales reached approximately 24% in 2024. It would be necessary to increase imports, further raising external dependency, ANP added.
“Depending on the origin of the imported product, foreign trade operations could take up to 60 days to be completed, meaning that it is not possible to immediately meet an additional demand of this magnitude,” the agency said.
ANP also concluded that eliminating biodiesel from diesel would affect its “lubricity”, potentially causing engine damage and financial losses for consumers.
The agency said that a suspension of the blending mandate would have major impacts on the biodiesel industry, which has made significant investments and produced approximately 9 million cubic meters in 2024.
“Brazil’s biodiesel production capacity has been growing over the years, with ANP granting new authorizations last year, both for new biodiesel plants and for expanding four existing ones, in addition to the construction of seven new plants currently underway,” the agency added.
In its decision, ANP also noted that removing biodiesel from diesel contradicts Brazil’s national biofuels policy (RenovaBio), particularly regarding the expansion of biofuel production and its use in the national energy matrix.
“Suspending the mandatory blend would go against all the efforts made at the national level to strengthen the country’s only regulated carbon program currently in full operation,” ANP said.
Sindicom did not answer a request from Fastmarkets to comment on the ANP’s decision by the time of the publication.
According to news reports on Thursday, March 27, producers and distributors reached an agreement to advocate for stricter enforcement against companies that fail to comply with the blending mandate.
ANP said in its decision that the agency is working on acquiring equipment that allows immediate detection of biodiesel content in diesel samples. The agency added that it has been adopting IT and intelligence solutions to enhance inspection actions and forming partnerships with other public agencies.