Brazil biodiesel caucus warns against import plans as government weighs market opening

Brazil’s Parliamentary Biodiesel Front (FPBio) has raised concerns over proposals under debate that would allow biodiesel imports into the country on the grounds of boosting market competition. The group’s reaction follows a long-standing demand from fuel distributors that resurfaced this month with the conclusion of Public Consultation No. 203/2025, launched by the Ministry of Mines and Energy (MME), which discusses rules for importing the biofuel and the possibility of allowing up to 20% of domestic demand to be met with imported product.

The increase in the biodiesel blending mandate to 15% (B15) in 2025, coupled with price volatility in recent years, has prompted companies in the sector to publicly press for import liberalisation. FPBio argues that such a move would be directly incompatible with commitments to foster domestic production set out in Brazil’s Future Fuels Law (Law 14,993/2024).

In a statement, FPBio said that, if approved in its current form, the measure could disrupt the sector, discourage investment and undermine regulatory predictability, which it described as essential for a highly regulated and capital-intensive industry.

Brazil is currently one of the world’s largest biodiesel producers, with a programme consolidated over more than two decades that fully meets domestic demand and maintains high levels of idle installed capacity, estimated at around 50%, with no signs of supply risk. According to FPBio, an indiscriminate opening of the market could squeeze profit margins at domestic plants, reduce incentives for new investment and weaken support for local production.

“In recent years, Brazilian biodiesel has reached record production levels, produced mainly from soybean oil, beef tallow and other regional feedstocks, supporting the income of thousands of rural producers,” FPBio said in the statement.

Last Friday (May 16), fuel sector associations issued a joint statement calling for an end to restrictions on imports, arguing that current rules limit competition and freedom of negotiation.

Signatories included the Brazilian Institute of Oil and Natural Gas (IBP), the Brazilian Association of Fuel Importers (Abicom), the National Federation of Fuel, Natural Gas and Biofuels Distributors (Brasilcom), the National Federation of Fuel and Lubricant Trade (Fecombustíveis), the National Union of Retail Transport Fuel Resellers (SindTRR) and the Federation of Mobility Companies of Rio de Janeiro State (Semov). The groups said there was no “technical or economic basis to restrict access to additional supply sources that increase market contestability and contribute to competitive discipline in the pricing of diesel B.”

The issue has split the federal government, with parts of the MME defending continued protection for domestic production, while the Finance Ministry has voiced support for opening the market. The matter is expected to be discussed at the next meeting of the National Energy Policy Council (CNPE).

The debate centres on the potential release of up to 20% of demand for supply with imported biodiesel at a time when the blending mandate is set to rise from 15% to 16% from March, a move that could further pressure prices.

FPBio reiterated that regulatory predictability and the strengthening of domestic production are essential to ensure investment, energy security and fair prices for consumers, without compromising the environmental and social goals that have made Brazil’s biodiesel programme a widely cited success.

Source: CNN Brasil

Sharing is caring!