Brazil: Implications of Biodiesel Imports on the Local Market

Brazil is opening up to biodiesel imports, a decision that has raised questions and potential impacts on its local energy market.

Share:

Brésil Importation Biodiesel Régulation Marché

Brazil, a major player in biodiesel production, is at an important regulatory crossroads. Recently, the National Agency for Petroleum, Natural Gas and Biofuels (ANP) approved the use of imported biodiesel in the mandatory blend with diesel A, currently set at 12% and set to rise to 13% from next April. This decision, formalized in Resolution 962/2023, follows on from Resolution 14/2020 of Brazil’s National Energy Policy Council, which already authorized imports for own consumption or experimental use.

Impact on the market and local players

The implications of these new regulations are many and complex. Imported biodiesel is not expected to exceed 20% of the total blended domestically, a market currently based on spot transactions. However, this opening up to imports comes at a time when Brazil has significant unused production capacity, divided between 61 authorized producers. According to ANP data, nominal biodiesel production capacity in Brazil was around 13.70 million cubic meters last year, but actual production was just over 6.20 million cubic meters.

Impact on local industry and prices

The prospect of an increase in the mandatory proportion of biodiesel in diesel A to 1% a year until it reaches 15% in 2026, raises questions about the impact of imports on local industry. Market participants, including fuel distributors and traders, are analyzing the potential risks to their businesses following the publication of this resolution. The arrival of imported biodiesel could introduce a new price and competition dynamic, potentially affecting market liquidity.

Benefits for Argentina and logistical issues

Argentina, as a major biodiesel producer, seems to be the main beneficiary of this regulation. Argentine products could have a greater impact in Brazil’s southern states due to logistical considerations. Imports from Argentina should improve from April onwards, coinciding with the country’s soybean harvest and the consequent increase in crushed volumes. Soybean oil is the main raw material for Argentina’s biodiesel industry.

Reaction from Brazilian industry

The Brazilian biodiesel industry, particularly the soybean oil sector, is reacting with suspicion to the ANP’s approval of imported biodiesel. André Nassar, Executive President of the Brazilian oilseed crushers’ association Abiove, points out that the price of Brazilian biodiesel is currently more competitive than that of imports, and that there is no shortage of the product. However, this decision could have a “negative impact” on local production.

Outlook for Brazilian Industry

Against the backdrop of the increase in the mandatory proportion of biodiesel in diesel A from April onwards, S&P Global estimates that Brazilian biodiesel production will reach 7.68 million tonnes in 2024, up 14.5% on 2023. On the raw materials front, the scenario looks favorable for the Brazilian biodiesel industry. Brazil is likely to repeat a historic soybean harvest of 158 million tonnes in the 2023-24 marketing year (February-January), with crushed volumes expected to rise by 3.7% to an all-time high of 56.10 million tonnes. Brazilian soybean oil production could reach a record 11.30 million tonnes in MY 2023-24, up from 10.70 million tonnes in MY 2022-23, with 5.26 million tonnes of this edible oil likely to be used for biodiesel production, an increase of 14% over the year, according to S&P Global forecasts. Soybean oil is the main feedstock for the Brazilian biodiesel industry, accounting for over 70% of all raw materials used in the production process, according to ANP data.

Brazil’s decision to allow the import of biodiesel in its mandatory blend raises critical questions about the balance between supporting local industry and promoting market competitiveness.

The asset takeover process of Global Bioenergies, under a pre-pack disposal procedure, has been extended until 18 July at noon, following requests from potential bidders seeking additional time to assess the French company's financial situation.
SIAAP and SUEZ have inaugurated a new biogas production unit at the Seine Aval wastewater treatment plant, the largest in Europe, as part of a modernization project to strengthen the energy sovereignty of the Paris region.
Canadian company Hydron Energy will supply its innovative INTRUPTor-Mid technology to produce renewable natural gas in Ontario, marking its first commercial order in the biomethane sector with a promise of significant cost reductions.
US President Donald Trump has ratified a law extending until the end of 2029 the tax credit on renewable natural gas production from biomass and animal manure, aiming to boost the rural economy.
Valmet secures a contract to deliver a bubbling fluidized bed biomass boiler and flue gas handling equipment to Kraftringen Energi's upcoming combined heat and power plant, aimed at strengthening energy supply in Sweden.
Elcimaï Environnement has completed a methanisation unit integrated into Laon's wastewater treatment plant, now enabling the conversion of sludge and bio-waste into biomethane injected into the local grid, meeting the annual energy needs of 1,150 households.
Infrastructure manager Teréga and GRDF inaugurated in Auch, Occitanie, the region’s first biomethane reverse-flow station, designed to facilitate biomethane transfer from the distribution to the transport network, representing an investment of €3mn ($3.27mn).
Eni has inaugurated its first vegetable oil extraction plant in Loudima, Republic of the Congo, marking the country's entry into the global biofuel supply chain for the transport industry.
The city of Toul has officially inaugurated a biomass heating plant operated by ENGIE Solutions, intended to supply heating from wood-energy to over 2,400 local homes starting from the next winter season.
North American biomethane capacity will increase by 70 million cubic feet per day in 2025 following a record growth of 139 mmcfd in 2024, driven notably by transportation sector demand, according to Wood Mackenzie.
The voluntary carbon market intensifies industrial interest in carbon capture within the pulp and paper and bioenergy sectors, creating an estimated $3 billion opportunity through carbon credit trading.
Germany’s announcement to eliminate double counting is shaking up manure-based biomethane and GHG certificate markets, prompting buyers to anticipate significant price hikes.
Enilive has started producing sustainable aviation fuel (SAF) at its biorefinery in Gela, Sicily, with an annual capacity of 400,000 tons, meeting nearly a third of Europe's projected demand for 2025.
Under growing pressure to decarbonize, the world’s leading oil companies are heavily investing in biofuels, with 43 projects aiming to boost sustainable fuel production by the end of the decade.
Skyven Technologies introduces an industrial heat pump capable of generating steam, reducing Western New York Energy's CO2 emissions by 20,000 tons a year.
Unions at the Cordemais coal-fired power station have called a strike and are demanding that EDF CEO Luc Rémont come to the plant to explain the abandonment of the biomass conversion project.
Haffner Energy and Bambbco collaborate to integrate bamboo as a new sustainable biomass source. The partnership aims to strengthen the supply of biomass for clean energy production, by exploiting marginal lands.
The CGT has revealed that EDF is considering halting the conversion of the Cordemais power plant to biomass, a project essential to the energy security of western France. EDF insists that the final decision has not yet been taken.
Hat: Gevo makes a strategic sale of tax credits generated by its renewable natural gas (RNG) site in Iowa, a transaction that strengthens its position in the renewable energy market.
NewEnergyBlue buys Inbicon's biomass technology from Ørsted, strengthening its global patent portfolio and licenses.