The government decided to bring forward the schedule for increasing biodiesel in diesel. As of March 2018, the biodiesel content jumps from 8% to 10%. By law, the mixture would go to 9% next year.
“For everything to happen, it is necessary to formalize it through a resolution from the National Petroleum Council (CNPE), which should occur soon, because there is a consensus that this program is a win-win. It is a positive agenda for Brazil”, says the general secretary of the Brazilian Association of Vegetable Oil Industries (Abiove), Fábio Trigueirinho.
Today, 80% of the country's biodiesel is made with soybean oil. The change in the mixture will increase domestic demand and grain processing. Abiove estimates that 20 thousand jobs can be created throughout the production chain.
This year, almost 2.9 million tons of soybean oil will be consumed to produce biodiesel. With the mixture at 10%, estimated consumption is around 3.6 million tons.
Soybean processing to make biodiesel increased from 14.3 million tons in 2017 to almost 17.9 million tons of grain in 2018.
The partner at MBAgro Consultora, José Carlos Hausknecht, explains that we will have less soy for export. In addition, bran production will increase, bringing benefits to the meat sector, with a greater supply of raw materials for food.
Hausknecht believes that oil prices – especially soybean – will be higher and that the change could also impact fuel. “Biodiesel is normally more expensive than diesel. This also ends up making diesel a little more expensive. Diesel consumers will have some effect, but it is small because it is an increase of 2% in the mixture, so it does not affect that much”, he explains.
For abiove, reducing the emission of pollutants into the air is one of the main advantages of biodiesel. For the soybean market, the increase in the mixture could make prices more firm. Trigueirinho states that it is interesting to have internal demand so as not to depend solely on the external market.
“The export market is subject to rumors from China and that kind of thing. I would say that the volume will not be enough to effectively move the market. We are, this year, exporting 64 million tons, but it helps”, explains Trigueirinho.
Source: Agrolink
