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August 19, 2019

Biodiesel Blend in Brazil will increase 1% to 11% on September 1st

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian National Petroleum, Natural Gas, and Biofuel Agency (ANP) has approved a 1% increase in the amount of vegetable oil blended into Brazil's biodiesel from 10% to 11% starting September 1st.

The increase was approved after test conducted by National Institute of Technology (INT) indicated that there would not be a problem in increasing the blend of vegetable oil up to 15%. Therefore, the blend percentage is expected to increase 1% per year until it reaches 15% in 2023. The biodiesel producers have long advocated that they have excess capacity and that they can easily meet the demand for the higher blend.

Soybean oil is the number one vegetable oil used in biodiesel, but the amount of soybean oil is capped by law at 80%. The cap was put in place to encourage other types of vegetable oil production and to benefit small farmers and producers. Without the cap, soybean oil would account for 100% of the vegetable oil used in Brazilian biodiesel.

Mato Grosso is the second largest soybean oil producing state in Brazil with 13 producers both large, medium, and small. In other major soybean oil producing states such as Goias and Rio Grande do Sul, biodiesel production is concentrated mainly among large producers.