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November 1, 2018

Proposal would increase Brazil's Biodiesel Blend to B15

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

The Brazilian Ministry of Mines and Energy (MME) through its National Council for Energy Policies (CNPE), recently proposed increasing Brazil's biodiesel from a B10 blend (a blend of 10% vegetable oil in petroleum diesel) to B11 blend starting in June 2019 (a blend of 11% vegetable oil in petroleum diesel). In addition to the increase for 2019, they are proposing increasing the blend 1% per year until it reaches B15 by March of 2023 (a blend of 15% vegetable oil in petroleu m diesel).

Since 80% of the vegetable oil used in Brazil's biodiesel fuel is soybean oil, the proposed increase would greatly increase the demand for soybean oil. By law, the blend is capped at 80% soybean oil with the remainder coming from other vegetable oils or animal fats. MME stated that the proposed higher blend would be dependent on the successful completion of ongoing tests.

The proposal was very well received by the Administrative Counsel of the Association of Biodiesel Producers of Brazil (Aprobio). The president of the counsel, Erasmo Carlos Battistella, recently told Reuters that adoption of the proposal would stimulate investments in the sector and could led to Brazil becoming the largest biodiesel producer in the world, a position currently held by the United States.

In addition to increasing the demand for soybean oil, the higher biodiesel blend could also have additional benefits including: increased industrialization of agricultural products, increased production of value added products, increased jobs, increased incomes for producers, less pollution, and improved quality of life.