Oct 25, 2009
B5 Biodiesel Will Be The Law In Brazil Starting In January 2010
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Brazil continues to press forward with their alternative fuels program by announcing that starting in January 2010 all the diesel fuel sold in Brazil will be B5, which is diesel blended with a mixture of 5% vegetable oil. Several years ago when the B5 blend was first proposed, it wasn't scheduled to take affect until 2013, but they have managed to reach their goal three years ahead of schedule. The B5 blend has lots of advantages for Brazil. It is less polluting than traditional diesel fuel and it generates jobs in the rural areas that grow the feedstock.
Currently, soybean oil accounts for about 80% of the vegetable oil used in the blend followed by tallow and cottonseed oil. The government has set up programs encouraging the use of other oils such as palm oil, nut oil, and castor bean oil, but those programs will take years to mature. In the mean time, soybean oil is going to be the primary feedstock because it has the volume and the logistical support to make it work. As the biodiesel program continues to expand in Brazil, more and more of Brazil's soybean oil will be used domestically instead of going into the export market.
There is a big difference between the alternative fuel programs in the U.S. and Brazil. In Brazil, their alternative fuel program is a source of national pride. Virtually everyone agrees with goal of being energy independent and they are committed to helping the country achieve that goal. Currently, nearly all of Brazil electricity is generated by hydropower and there are many more hydropower plants on the drawing board. Last year, Brazil passed a major threshold of using more alcohol in the automobile fleet than gasoline. Now Brazilians are convinced that they can grow their fuel supply as well as supply these alternative fuels to the rest of the world. In a study released in early 2009, the Brazilian sugarcane association estimated that Brazil could replace 10% of the world's gasoline if they increased their sugarcane production by two and a half times. In Brazil there is unity of purpose when it comes to alternative fuels, I don't think you can say that about the U.S. alternative fuel program.