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Biodiesel content currently stands at about 10% in Brazil (Image: DTN)

Source: Brazil can sustain 2% hike

in biodiesel level of trucking fuel

THE Brazilian Oilseed Processors Association faces a higher risk of seeing diesel imports from
(ABIOVE), a group set up by 13 companies the US disrupted because of the Atlantic hurri-
that account for more than half of Brazil’s total cane season. This would relieve some concerns
soybean processing volume, says the country’s about supplies at a time when global oil and fuel
inventories of vegetable oil are big enough to markets are volatile.
raise the amount of biodiesel blended into the However, it would also exert some upward
diesel fuel used by truckers to 12%, according to pressure on domestic diesel prices. Biodiesel
a report from Bloomberg. is more costly than petroleum-based diesel, so
A source with knowledge of the matter told raising content levels would make diesel blends
the news agency earlier this week that ABIOVE’s more expensive at a time when prices are already
estimates show that Brazilian producers can running high because world crude oil markets
deliver enough oil from their inventories and have been so bullish since the Russian invasion
exportable surpluses to raise biodiesel content of Ukraine in late February.
from the current level of 10% to 12%. He noted, In turn, higher diesel prices might create
though, that soybean producers might have dif- more turmoil on Brazil’s political scene. Fuel
ficulty supplying the amounts needed to raise prices are already a hot-button issue in the South
the figure to higher levels. American country, and President Jair Bolsonaro
Bloomberg’s source was referring to reports is hoping to avoid being blamed by voters for
that Brazil’s government was considering pro- economic hardship as he seeks another term in
posals to raise biodiesel content in trucking office. (Brazil is slated to hold its next presiden-
diesel to 15% if diesel inventory levels remain tial elections in October of this year.)
relatively low in the second half of the year. As of press time, the statements from
The news agency said it had learned of the pro- Bloomberg’s sources could not be con-
posal from people with direct knowledge of the firmed. Brazil’s Ministry of Mines and Energy
subject who spoke on condition of anonymity responded to the news agency’s request for com-
because the discussions had not been made ment by reporting that no decision had been
public. It quoted one of the anonymous sources made with respect to altering biodiesel content
as saying that the higher biodiesel content levels, and the National Agency of Petroleum,
level would only remain in place for a limited Natural Gas and Biofuels (ANP) did not answer
period if this plan were approved, but it did not questions directly. Instead, it said in a statement
elaborate. sent to Bloomberg that it was keeping track of
Raising biodiesel content would have posi- diesel market conditions and would propose the
tive consequences, in that it would help bolster measures necessary to safeguard supplies. It did
inventory levels at a time of year when Brazil not say what the measures might encompass. ™

P12 www. NEWSBASE .com Week 23 09•June•2022