Brazil sets 12% blending mandate for next biodiesel auction

HOUSTON (ICIS)–Brazil will set the obligatory blending mandate of biodiesel into diesel at 12% for the country’s next biodiesel auction, according to an order from the country’s National Council for Energy Policy (CNPE) approved by President Jair Bolsonaro.

The order was made in the interest of the country’s national energy policy amid easing biodiesel prices in the country.

The mandate will be in place for the country’s 81st biodiesel auction, coinciding with the September-October delivery period.

The 12% mandate represents a decrease from the 13% mandate in place earlier this year but an increase from the temporary reduction in the mandate to 10% in place from April.

The government initially reduced the obligatory blending mandate of the biofuel into diesel from 13% to 10% in April – coinciding with the May-June delivery period of the country’s 79th biodiesel auction – amid bullish feedstock soybean oil (SBO) costs against the backdrop of rising inflation that drove local biodiesel prices to historic highs.

Biodiesel is an alternative fuel used in diesel engines produced from renewable resources. The most commonly used feedstocks are palm, soy and rapeseed oil.