Brazil raises biofuel levels, sees gasoline self-sufficiency
SAO PAULO, June 25 (Reuters) - Brazil's National Energy Policy Council (CNPE) on Wednesday approved increasing the level of biofuels mixed into fossil fuels, a move towards gasoline self-sufficiency that was also celebrated by renewable energy lobbies after the government earlier hinted the blends would not be changed this year.
From August 1, the proportion of ethanol to be mixed in gasoline will rise to 30% from 27%, and the amount of biodiesel in diesel increases to 15% from 14%, Pietro Mendes, oil and gas secretary at the energy ministry, said during an event to announce the changes.
Mines and Energy Minister Alexandre Silveira also said at the event that the change in the biofuels mandate would make Brazil "gasoline self-sufficient for the first time in 15 years."
Earlier this year, the CNPE had decided to hold the biodiesel blend at 14% amid fears the proposed increase could push up food prices and damage the government's approval ratings, something industry groups disputed.
In March, Brazil's ministry of mines and energy said increasing the proportion of ethanol in gasoline to 30% was backed by tests showing "consistent performance" and "real environmental benefits."
"We see Brazil increasingly becoming a global leader in the decarbonization process," Daniel Amaral, director of economics and regulatory affairs at soy industry group Abiove, told Reuters.
Some 70% of Brazil's biodiesel is produced from soybeans, while its ethanol is made from sugarcane and more recently from corn.
According to the International Energy Agency, biofuels like ethanol and biodiesel play an important role in decarbonizing the global transport sector and cutting emissions of greenhouse gases linked to burning non-renewable fuels.
Aprobio, which represents biofuels producers, said in a statement the decision is fundamental to reducing dependence on petroleum derivatives.
"The timeline is short, but I think the government is betting on the generation capacity of the corn ethanol industry," Amance Boutin, business development manager at consultancy Argus, said on the sidelines of Argus' biofuels and feedstocks Latin America conference in Sao Paulo.
The 3% increase in ethanol would reduce gasoline demand by 1.33 million cubic meters, Boutin said, adding that Brazil's external gasoline deficit in 2024 was 872,000 cubic meters, meaning the South American country will achieve gasoline self-sufficiency with the move.
"The advancement of biodiesel is strategic for national energy security, especially in the face of recent geopolitical instability, such as the conflicts in Ukraine and the Middle East," biofuel producer Grupo Potencial said in a statement.
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