Brazil is fast tracking adoption of higher biodiesel blend mandates, which should see the country’s consumption jump from 7% to 10% over the next three years, Brazilian vegoils association Abiove said on Thursday.
The lower house of Brazil’s National Congress on Thursday rubber stamped the increase in the mandatory domestic blend. The bill containing the measure will now go for presidential signature within the next 15 days.
The new law will require a 1% hike in the current blend to an 8% biodiesel incorporation target up to 12 months after the bill is enacted. Within 24 months of the bill being passed the blend will rise again to 9%, hitting 10% 36 months after the law comes into force.
The bill also establishes a potential pathway to even higher blends. When the domestic blend hits 10%, Brazil’s National Energy Policy Council will conduct engine tests for vehicles using B10 and B15, setting the stage for a further hike in mandate to a 15% blend. The bill also clears the way for the public transport, railway, mining and inland waterway sectors to consume biodiesel at blends above 15%.
Brazil’s biodiesel blend hike echoes moves in other raw material export heavy economies to hike mandated blending demand to absorb output amid the wider commodity price slump. Indonesia is still pursuing its goal of a B20 palm biodiesel mandate, although the steep rise in palm oil spreads to gasoil has shrunk the subsidy power of the export tax generated fund the government set up to finance the increase in home grown biodiesel offtake.
MS – 04/03/2016