Ministry wants to ban imports of biodiesel for blending with diesel

The Ministry of Mines and Energy (MME) will present a proposal at the next meeting of the National Energy Policy Council (CNPE) to ban the import of biodiesel for use in the mandatory blend with fossil diesel in Brazil, Valor has learned. Today, the blend is 12%.

The meeting is scheduled for the 14th and the ministry has asked the other ministries that are part of the Council to give their opinion, including the Ministry of Finance, which has not yet finalized its position on the issue.

In a letter seen by Valor, the MME mentions that the National Agency for Petroleum, Natural Gas and Biofuels (ANP) approved a resolution in November allowing imported fuel to be used for up to 20% of the mandatory blend. The measure, which will take effect in January 2024, has provoked a reaction from the production sector.

The Joint Parliamentary Front for Biodiesel (FPBio) asked the CNPE to stipulate that the blend can only be met with national biodiesel, alleging a “breach of isonomy” between market players and claiming that opening up to imports could lead to a “destructuring of the national biodiesel value chain.”

The Front emphasized that the industry has a “high level of idleness” following recent investments in new plants and the expansion of existing ones. This would have been a response to the CNPE resolution, which proposed in 2018 to increase the blend up to 15% by 2023.

FPBio also argues that “potential world suppliers” such as Argentina, Indonesia, and China “practice heavy export subsidies and could destroy a significant part of the national park through predatory competition.”

The lawmakers also cite the risk to “food security, since the demand for soybean oil for biodiesel production is responsible for the supply of some 20 million tonnes of meal.” The document asks for an urgent analysis of the request.

In an initial analysis, the MME said it should accept FPBio’s arguments that opening up the market could pose “risks to the regular supply of biodiesel.”

Another request from the industry is to bring forward the mandatory blend to 15% from March 2024. Under the current timetable, this level would not be reached until 2026. This issue could also be discussed at the next CNPE meeting.

Source: Valor Econômico

Click here to read the original news article: https://valorinternational.globo.com/agribusiness/news/2023/12/08/ministry-wants-to-ban-imports-of-biodiesel-for-blending-with-diesel.ghtml

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