Brazil to raise biodiesel mandate to 12% in 2023

Updates with official confirmation, adds minister’s comment

BRASILIA, March 17 (Reuters) – Brazil’s National Energy Policy Council (CNPE) on Friday raised the country’s mandatory blend of biodiesel in diesel to 12% starting in April, Mines and Energy Minister, Alexandre Silveira said.

The council, which includes Silveira among other ministers, also proposed a gradual increase in the mixture over the next few years, with the level rising to 13% in 2024, 14% in 2025 and 15% in 2026.

The decision meets requests from biodiesel producers, after the biofuel blend in diesel was held at 10% throughout 2022.

Biodiesel was introduced compulsorily into the Brazilian fuel matrix in 2008. Since then, the mixture of biodiesel in highway diesel has gradually increased from 2% to 13% in 2021.

The increase this year will raise diesel prices at the pump by 0.02 real per liter, Silveira said.

The measure is expected to favor mainly the soy industry, since about 65% of the total biodiesel was produced with soy oil in 2022.

Discontent is likely to arise from sectors linked to road transport, automakers and the fuel sector, which have criticized biodiesel, arguing that a higher mix could cause problems for engines.

(Reporting by Lisandra Paraguassu; Editing by Steven Grattan)

((Peter.Siqueira@thomsonreuters.com; +55 11 56447727;))

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