Brazil to Increase Biodiesel in Fossil Fuel

By Lise Alves, Contributing Reporter

SÃO PAULO, BRAZIL – In an effort to reduce the import of diesel fuel and reduce pollution, Brazil’s President Dilma Rousseff last week signed an executive order increasing the amount of biodiesel to be added into diesel fuel starting in July. The order increases the mixture of biodiesel from the current five percent to six percent (B6) starting July 1st and from six percent to seven percent (B7) starting November 1st.

“This order strengthens our bio fuel industry by securing the market and improving profitability,” wrote Rousseff in her official Twitter account.

According to Carlo Lovatelli, president of Brazilian Association of Vegetable Oils, or ABIOVE, today more than twenty percent of all diesel fuel consumed in the country comes from abroad. ABIOVE data shows that in 2013 more than 10.5 million cubic meters of diesel oil was imported by Brazil, at a cost of US$2.7 billion.

“This contributes negatively for the financial result of Petrobras,” states the association, since the state-owned company is the one which imports the diesel but is unable to pass on the final cost of importing to its consumers.

For Lovatelli the latest policy measure is very welcomed. “Everyone benefits with the higher use of biodiesel: population, manufacturers and small family farms.” ABIOVE has proposed an increase of the mixture of up to ten percent (B10).

The biodiesel increases in July and November will bring benefits to the Brazilian oil trade balance, by reducing imports, said Rousseff during the announcement ceremony. “We will have a reduction of imports of 600 million liters of diesel oil for every one percentage of biodiesel added to the mixture.” The President, however, noted that the increase of the mixture of biodiesel in diesel fuel will not have a significant increase in inflation.

The increase of biodiesel percentage in the mixture also means lower emission of pollutants, said Rousseff. “It is an option in favor of a renewable energy matrix, with more regional development, job generation and income in our country.”

According to the President the increase of biodiesel mixture in diesel also has significant impact on the reduction of gases which cause the greenhouse effect. Data released by the Brazilian Ministry of Energy indicates the adoption of higher percentages of biodiesel in the fossil fuel will reduce by 23 million tons Brazilian CO2 emissions by 2020.

Reports from the Ministry of Energy shows that the country currently has 57 biodiesel units with the capacity to produce 7.5 billion liters per year. The President noted that the main achievement of the biodiesel program, which was started in 2004, was the continuity of production.

“I want to thank all small family farms and all soybean producers in the country because they sustained and gave consistency to the program,” she said. Close to three-fourths of all biodiesel production is manufactured from soybean grains.

The President said that Brazil came in to the biodiesel producers ranking already at a high position and is currently one of the top four producers of the product in the world. “Our objective is to be the second largest biodiesel producer in the world.”