“Incalculable loss”, says Abiove about a 10% biodiesel blend for 2022

The expectation of reaching 15% of biodiesel in the diesel composition by 2023 was left behind after the National Energy Policy Council (CNPE) decided to maintain the 10% content for the year 2022.

The measure frustrated entrepreneurs in the sector who have been investing since 2016 in expanding the composition of the fuel, when the new production ceiling was approved.

With the capacity to expand biodiesel production to reach 18% of the mixture, Daniel Amaral, chief economist at Abiove, stated that the investment made is at a standstill and there is still no way to calculate the damage.

“We have factories ready to open in several important states in the country, we even managed to make B18 (diesel with 18% biodiesel in the composition). But the entrepreneur’s confidence was broken. The damages are incalculable”, highlighted the economist.

Biodiesel was introduced on a compulsory basis in the Brazilian fuel matrix in 2008. Since then, the mixture in diesel for road use has gradually grown from 2% to 13%. Amaral also highlights the impact of unemployment in the sector, which is based on family farming.

“It will especially harm the family farmer, the most sensitive part. Today, with 12% of mandatory mixing, we have 74 thousand families in this process, next year we will already have 61 thousand families, around 13 thousand families less”, he said.

“If we consider that next year it was supposed to be 14%, we would have an expansion to 86 thousand families. And if we consider that each family has about two helpers, the impact reaches 250 thousand people, directly and indirectly”, he estimated.

Another highlight is the forecast for a record soy harvest for next year, totaling around 144 million tons. The economist assesses that, without this increase in biodiesel, Brazil will have to spend R$1.2 billion more next year on importing fossil fuels.

According to the Ministry of Mines and Energy, the body to which the CNPE is subject, the justification for maintaining the percentage is the high cost of vegetable raw materials for the preparation of the product. The decision is a strategy to contain the price rise.

“The decision taken this Monday is in line with the interests of society, reconciling measures to contain the price of diesel with the maintenance of the National Biofuels Policy, providing predictability, transparency, legal and regulatory security to the sector,” stated the Ministry.

*Under supervision of Stéfano Salles