The announcement was made in a ceremony held by the Brazilian government with biofuel associations and companies right after the CNPE’s meeting where the decision was made official.
The increase in the biodiesel mandate was set to start in March, but it was halted in February amid concerns regarding high food inflation costs.
The Fuels of the Future law foresees an annual increase in the blending mandating of 1 percentage point until it reaches 20% in March 2030. The delay had a major impact on the biodiesel sector, with slower demand for feedstocks such as soyoil and tallow and margin deterioration.
“With the Iran-Israel conflict, we are currently experiencing very high price volatility and the risk of disruption to global supply chains. This measure is important for Brazil’s geopolitical stability. By reducing fuel imports, we become more resilient to any international scenario,” Pietro Mendes, national secretary of oil, gas, and biofuels, said during the event.
According to Mendes, by not adopting policies to increase biofuel blends in fossil fuels, Brazil would be “very susceptible” to the impacts of the conflict on the price of imported gasoline and diesel.
Fuel versus food debate
Mendes also presented figures contesting the fuel versus food debate in the case of ethanol and biodiesel, saying that Brazil will increase the industrialization of corn and soybeans with these measures, increasing the supply of feed for protein production.
“More corn processing means more [distillers’ dried grain], more protein, so it boosts food security,” he said.
“Processing soybeans in Brazil increases the supply of protein, because 80% becomes soymeal, and 20% becomes soyoil, and biodiesel drives the entire soybean industrialization chain in Brazil,” Mendes added.
Regarding concerns about combating fraud in the fuel sector, which was listed as one of the reasons for pausing the increasing mandate schedule, he said that inspection actions increased by 45% from January to May, and five fuel distributors were temporarily prevented from operating due to irregularities.
The increase in the ethanol blend will allow Brazil to no longer be a net importer of gasoline and instead generate an exportable surplus.
“With this historic act, we will once again be self-sufficient in gasoline after 15 years. We have reduced the need to import diesel. This is energy sovereignty. We are working towards a balance between economic development and sustainability,” the Minister of Mines and Energy, Alexandre Silveira, said.
Brazil’s president, Luis Inácio Lula da Silva, pointed out that these blend levels could have been reached sooner.
“It’s sad that after 15 years I’ll be the one to raise the percentage of the blend again. This could have been done before. We could be discussing 20%. Discussing more,” Lula said during the ceremony.
Erasmo Battistella, president of biofuel producer Be8, also noted at the ceremony that it took 11 years for Brazil to get to B15 after it was approved in 2014.
“We finally got the biodiesel blending schedule up to date. And we strongly believe that we will continue to build together the milestones that needed to build toward the implementation of the Fuels of the Future, increasing this biodiesel blend from 15% to 20%,” he added.
Adoption of B15 and E30 is an “important step”
The Brazilian Association of Vegetable Oil Industries (Abiove) said the adoption of B15 and E30 is an important step in the advancement of the Fuels of the Future law, reinforcing Brazil’s leading role in the energy transition.
“Increasing the biodiesel blend strengthens family farming and reduces dependence on imported diesel, while E30 consolidates our clean and renewable matrix. These are measures that combine energy security, sustainability, and job and income generation in the country,” Daniel Furlan Amaral, director of economics and regulatory affairs at Abiove, said, in a note.
“The CNPE’s decision to comply with the provisions of the Fuel for the Future should be celebrated. In Brazil, the issue of biofuels transcends the question of climate and the goals of decarbonizing the energy matrix,” Francisco Turra, president of the board of directors at the Association of Biofuel Producers of Brazil (Aprobio), said, also in a statement.
“The decision by the CNPE to increase the mandatory blend to B15, announced with the support of President Lula and Minister Alexandre Silveira, is a recognition of the strategic importance of biodiesel for Brazil,” Donizete Tokarski, chief executive officer of the Brazilian Union of Biodiesel and Biokerosene (Ubrabio), said, in a statement to Fastmarkets.
Other biofuel producers celebrated the rise in biofuel blending rates.
“Biodiesel is a development vector that combines sustainability, value generation in the field, and international projection,” Carlos Eduardo Hammerschmidt, vice president of Grupo Potencial, said in a note.
The company will invest in a new soybean crushing plant, with a capacity of up to 7,000 tonnes per day, set to come in line next year, complementing the expansion of the Lapa/PR unit, totaling approximately 3 billion Reais ($541 million).
“This move toward the approval of B15 demonstrates Brazil’s commitment to decarbonization. In the middle of the COP30 year, we are showing the world that it is possible to reconcile development with sustainability,” André Lavor, CEO of Binatural, said in a statement.
The Mixed Parliamentary Front of Biodiesel in the National Congress (FPBio) noted that the Brazilian government’s decision promotes national sovereignty “in the midst of so many uncertainties on the international scene, which affect prices and cause instability in the markets” while “guaranteeing the expansion of investments in the order of 200 billion Reais; boosting the energy transition, reducing greenhouse gas emissions, as well as stabilizing prices in the protein chain.”
The Brazilian government said that raising the blending rates will translate into investments of 5.2 billion Reais for the biodiesel production chain, including soybean crushers and biodiesel plants, and 10.14 billion Reais for the ethanol production chain, including plants and machinery.
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