• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 7 hours Its going to be an oil bloodbath
  • 31 mins Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 1 hour Marine based energy generation
  • 3 hours What If ‘We’d Adopted A More Conventional Response To This Epidemic?’
  • 1 hour US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 15 hours Cpt Lauren Dowsett
  • 14 hours The Most Annoying Person You Have Encountered During Lockdown
  • 17 hours Which producers will shut in first?
  • 1 day CDC covid19 coverup?
  • 1 day How to Create a Pandemic
  • 11 hours Trafigura CEO Weir says, "We will see 30% to 35% drop in demand". That amounts to 35mm bbls/day glut ! OPEC+ 10 mm cut won't fix it. It's a DEMAND problem.
  • 5 hours Real Death Toll In CCP Virus May Be 12X Official Toll
  • 16 hours Washington doctor removed from his post, over covid

Breaking News:

IEA: OPEC Can’t Save The Oil Market

Alt Text

Trump Scrambles To Win Back Angry Farmers

The Trump administration is trying…

Alt Text

The Fatal Flaw In The Ethanol Industry

The ethanol industry is extremely…

Joao Peixe

Joao Peixe

Joao is a writer for Oilprice.com

More Info

Premium Content

Brazil Grapples with Biofuel Supply Glut

Brazil is eyeing a 5% increase in biodiesel requirements in January 2014 and up to a 10% increase in biodiesel requirements for 2020 as the country deals with a supply glut.

The blend rate for biodiesel with regular diesel may rise to 7% before 2020, in line with a gradual increase working up to 2020.

In 2008, Brazil mandated distributors to blend 2% biodiesel with diesel, forecasting a 5% rate in 2013. However, unexpectedly high production has forced a rethink of the requirements, especially with biodiesel growth suspected to increase 40%.

Brazil’s crop monitoring agency, Conab, forecasts a record year for soybean crops, 10% higher than last year, and figures that would make the country the top producer of soybeans in the world. New blend rate requirements of 7% for January would mean using an additional 9 million tons of soybeans.

Related article: EU Kills Bill to Limit Food-Based Biofuels

Brazilian demand for biodiesel for 2013 is around 3 billion liters. With the new 7% blend requirement, demand could reach 4 billion in 2014. Overall, Brazil has a production capacity of 7 billion liters per year.

As in the US, where biofuel producers are supporting the mandate, while distributors are balking, an increase in the biodiesel requirement in Brazil is being strongly lobbied for by soybean producers.

The difference here is that the increase mandate would benefit state-run oil company Petrobras, which is deep in debt and forced to import diesel fuel to make up for shortfalls in domestic refining—and sell it at a loss. For the first six months of 2013, Brazil consumes 38 billion liters of diesel, 7 billion liters of which were imported.

Analysts estimate that an increase in the biodiesel mandate to 7% for next year could save Petrobras $900 million annually just by lowering fuel imports.

Related article: Germany Looks to Straw for Home Heating

It will also be a boon for multinational companies who have hedged their bets in recent years that Brazil would mandate more biodiesel with the construction of new biodiesel plants.  

Soybean oil makes up about 85% of the feedstock for biodiesel production in Brazil. Brazil currently houses 64 plants for producing biodiesel, with 10 new plants approved for construction and six more awaiting approval.

By. Joao Peixe of Oilprice.com


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News