Brazil reduces mandatory biodiesel content in fuel, which increases pressure on soybean complex prices

According to Reuters, Brazilian President Jair Bolsonaro signed a law that reduces the mandatory content of biodiesel in fuel to 10% for the period 2022, which upset local biodiesel producers.

Previously, it was expected that the share of biodiesel in the country will be reduced to 14% from March 2022, but the National Energy Policy Council (CNPE) at the end of November decided to reduce it to 10% due to high soybean prices and their significant impact on the final fuel price, since 75% of biodiesel is made from soybeans. In September, CNPE has already reduced the minimum biofuel content to 10%, while in 2021 it was planned at 13%.

Brazilian biodiesel producers and soybean processors ' associations opposed CNPE's decision to ease minimum requirements for biofuels, hoping that the president would eventually change the percentage of mandatory shares. Francisco Turra, Chairman of the Management Board of Aprobio biofuels, recently announced that the president will change his position and meet the requirements of soybean processors.

However, on Friday, the presidential administration said that in 2022, the share of biodiesel content will be reduced to 10%, as Bolsonaro loses popularity due to high fuel prices. The press service of the Administration reported that these measures were taken in order to protect the interests of consumers regarding the ratio of price, quality and fuel supply.