RIO DE JANEIRO, BRAZIL – Brazil, like Argentina, has decreed a reduction in the share of biofuels in fossil fuels. The announcement was supposed to be for a short time, but this week the National Council for Energy Policy confirmed that the decision will be upheld until 2022.
This measure implies that the minimum share will be 10%, against 13% before. At the time, the Bolsonaro government argued that the price of the raw material was too high. However, the biodiesel industry associations say that there is no justification.
BIODIESEL
Through a statement, the Brazilian Association of Vegetable Oil Industries (ABIOVE), the Association of Biofuel Producers of Brazil (APROBIO), and the Brazilian Union of Biodiesel and Biokerosene (UBRABIO) warned that the decision to maintain the minimum biodiesel blend at 10% (B10) for the whole year 2022 is a mortal blow to predictability. In addition, they commented that it undermines the investments that were made.
“By adopting the 10% blend content, the government penalizes the sector, generating unemployment throughout the country, promotes disinvestment, increases pollution, inflation, damages the economy and distances the country from the decarbonization commitments outlined during the United Nations Climate Change Conference 2021 (COP26)”, the entities clarified.
With this decision, the industry informed that 2.4 billion liters would be lost,with a corresponding reduction of US$2.5 billion in income. The sector recalled that there is installed capacity to replace up to 18% of diesel with biodiesel. In addition, they highlighted that biodiesel has one of the most demanding specifications in the world.
“The Federal Government’s decision reflects a position of defense of imported fossil diesel and has repercussions on the interests of the oil sector,” the industry statement concluded.