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March 7, 2017

Biodiesel Blend in Brazil Increased from B7 to B8, could go to B15

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

The Brazilian government increased the percentage of vegetable oil in diesel fuel from the current 7% (B7) to 8% (B8) last Wednesday, March 1st. The mixture will be increased to 9% (B9) on March 1, 2018 and to 10% (B10) on March 1, 2019. The mixture could go even higher with tests underway looking at an eventual 15% blend (B15).

The government sees this as a way to reduce diesel imports and to support Brazilian agriculture since 80% of the vegetable oil used in biodiesel is soybean oil. The other 20% of the vegetable oils are various oils that are sourced from small family farmers and the increased blend percentage is seen as a way to help small family farmers. The Brazilian Minister of Mines and Energy has indicated that the installed capacity of biodiesel in Brazil is more than sufficient to support the 10% mandate.

According to a report from the Ministry of Mines and Energy issued last Friday, tests will be conducted between February 28, 2017 and February 28, 2018 on the feasibility of increasing the blend to 15%. The results of these tests are expected to be available in January of 2019 if not sooner.

Industry officials have been pushing for a higher blend for a number of years and they contend that a 20% blend (B20) should be considered for large urban areas as a way to reduce harmful pollutants that cause significant health problems for urban populations.