Government reduces again biodiesel blend in diesel to contain fuel price | Economie

The goal is to maintain the price of fuel, which is a demand of truck drivers. The average value of a liter of diesel is 4,627 BRLAccording to a survey conducted by the National Agency for Petroleum, Natural Gas and Biofuels (ANP). Since May, the government has announced successive cuts to contain the price of diesel (see below).

The decision was made during a meeting, on Monday, of the National Energy Policy Council (CNPE), chaired by the Minister of Mines and Energy, Pinto Albuquerque. The council is made up of several ministers and the Energy Research Corporation (EPE), the state-owned company responsible for energy planning.

According to the government, about 71% of biodiesel is made from soybean oil, an internationally priced raw material, Because of the increased demand and the depreciation of the riyal against the dollar. Therefore, it was necessary to “adopt a temporary measure to reduce the biodiesel content”.

“[…] During 2021, the global market still has a strong demand for soybeans, which increases the price of the commodity on the international scene. In the domestic market, the price of soybeans is also driven by the devaluation of the Brazilian currency against the dollar,” says the government in a note.

“Thus, given that Brazilian biodiesel contains the largest share of raw materials in soybean oil, at about 71%, and the rest comes from beef and other oils, there is a need to adopt a temporary measure to reduce the biodiesel content due to the potential effects of the Brazilian consumer and responses Act in many sectors (public transportation, goods) and activities (agriculture and power generation, for example), the government says.

Although said to be a temporary measure, since April the government has announced reductions in the biodiesel blend in diesel.

The decision coincided with the expiration of the temporary measure that reduced rates Federal PIS and Cofins Taxes for Diesel. The provisional measure has lost its effect as of 1 May:

• April 13: The government officially announces for the first time the reduction of the mixture of biodiesel in diesel from 13% to 10%. Valid for Biodiesel Auction No. 79 (May, June);
• May 14: The government keeps reducing the biodiesel content in diesel from 13% to 10%. Valid for the 80th Biodiesel Auction (From July to August); NS
• July 12: The government reduced biodiesel in diesel from 13% to 12%. Valid for the 81st Biodiesel Auction (September to October).

In a statement, the government said it would “continue to advocate for the role of bioenergy in the energy transition, having made a voluntary commitment based on RenovaBio’s targets to reduce the average carbon intensity of the fuel matrix.”

“Thus, the CNPE’s decision to reduce the biodiesel content in the mixture is momentary and temporary It is expected soon, with the right conditions, an increase in the production and use of biofuels in Brazil, in accordance with the objectives of our national policy (Law No. 13.576 / 2017)”, concludes the government.