October 18, 2016

Brazil's Biodiesel Sector Promotes Greater use of Biodiesel Fuel

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

Representatives of Brazil's biodiesel sector met in Mato Grosso last month to extol the virtues of increasing the blend of vegetable oil in the nation's diesel fuel supply. As reported by So Noticias, in a joint meeting of the First Bioenergy Conference of Mato Grosso and the Third Sugar Sector Conference of Central Brazil, biodiesel was touted as being clean, renewable, and cheap. The Superintendent of the Brazilian Biodiesel Union (Ubrabio), Donizete Tokarski, emphasized that biodiesel could also be a critical part of Brazil's efforts to reduce greenhouse gas emissions.

During the same week as the conference, the Brazilian government ratified the Paris Climate Accord document approved by 197 countries. Brazil's goal is to reduce greenhouse gas emissions by 37% by 2025 and 43% by 2030 compared to the levels of 2005.

According to Ubrabio, a critical way that Mato Grosso could help Brazil achieve their goal of greenhouse gas reductions would be to increase the use of biodiesel fuel. By their estimates, utilizing a blend of 30% vegetable oil in diesel fuel (B30) by the year 2030 would reduce greenhouse gas emissions in the transportation sector by 80%.

Currently the biodiesel fuel in Brazil contains 7% vegetable oil (B7) and that will increase to 8% (B8) in 2017 and 10% (B10) by March of 2019. Transportation companies are contemplating using a B20 mixture in the near future and big consumers such as agriculture, industry, and railroads feel the mixture could increase to B30.

The vegetable oils used to blend with diesel is currently 77% soybean oil, 19.3% beef tallow, 0.43% fruit oil, 2% cotton seed oil, and 0.97% other oils. There is plenty of soybean oil in Brazil to meet the potential increased demand, but the government wants to diversify the types of vegetable oil used, so the percentage of soybean oil allowed in biodiesel is capped at 80%.

The biodiesel sector also feels there is a public health benefit by using more biodiesel fuel. Research presented at the conference indicated that using a blend greater than B7 would reduce diseases associated with air pollution and subsequent hospital admissions. Their study indicated a potential reduction of 52,000 hospital admissions over the next ten years representing a savings of R$ 2 billion in public health expenditures.

Representative form the Brazilian Vegetable Oil Producers Association (Abiove) emphasized the need to add value to Brazil's soybean production instead of just exporting the grain. The state of Mato Grosso is the second largest producer of biodiesel in Brazil with 15 producing industries.