Energy Policy Council to discuss increasing mandatory biodiesel blend in diesel this Friday | Policy

The National Energy Policy Council (CNPE) — responsible for advising the President of the Republic on energy policy — will hold its first meeting in the Lula government this Friday (17).

The meeting gained interest for three reasons:

🛑 Currently, the mandatory addition of biodiesel to fossil fuels is 10%, below the percentage specified in the National Biofuels Policy (RenovaBio).

The percentage reduction was one of several measures adopted by the Bolsonaro government to reduce the price of diesel.

Amid the war in Ukraine, the price of soybean oil – the main feedstock for biodiesel – has skyrocketed. As a result, the higher the blending ratio, the greater the effect on the final diesel price.

▶️ Due to the RenovaBio policy, which has been suspended by the government, the The blending rate should have been 14% from March 2022 and I have it exceeded 15% in March of this year.

The Lula government decided to maintain the 10% rate until this month of March to decide, at the CNPE meeting, a new timetable for increasing biodiesel – more environmentally sustainable than diesel, a polluting fossil fuel.

🔍 Although the agenda of the CNPE has not been previously revealed, the g1 discovered that the council will discuss this Friday will present to president Lula his proposal increasing the mandatory percentage of biodiesel added to diesel from 10% to 12% or 13%.

A gradual increase of the mixture will also be proposed, to reach 15% in 2025. These rates were discussed in technical meetings prior to the CNPE ministerial meeting.

The timetable, however, may change, as it also depends on the industry’s ability to supply enough biodiesel to the market. But, as found by the g1the assumption that there is no increase in the mixture is ruled out.

The no-increase case was raised because the National Transport Confederation (CNT) says a potential increase in content “will create additional costs in the value of the freight to be transported to the entire population.”

According to CNT, the biodiesel used in Brazil reduces the energy efficiency of bus and truck engines, which increases fuel consumption.

The CNT won the support of entities representing motor vehicle and engine manufacturers, as well as fuel distributors and the union representing public urban bus transport.

Biodiesel producers (Aprobio and Ubrabio) dispute CNT’s claims. “In Brazil, no damage to machines and engines has been demonstrated by the direct or indirect action of biodiesel use,” the associations said in a note.

They also say that using biodiesel “reduces emissions of particulates, carbon monoxide and hydrocarbons, demonstrating on a large evidence base that biodiesel reduces air pollution and is beneficial to the environment”.

The government, when deciding to increase the blend, must adopt the same line of defense used by the producers, that is to highlight the socio-environmental benefits of biodiesel. Decarbonisation is one of President Lula’s commitments.

Also in favor of increasing the biodiesel blend is the new formulation of CNPE.

Different ministers who are part of the council have already spoken publicly in favor of increasing the mix, such as vice president Geraldo Alckmin and ministers Carlos Fávaro and Renan Filho. The increase is also supported by portfolios linked to the environment.

By decree published at the end of February, the following ministries joined the council:

The body already consisted of: