Diesel: Service stations ask for revision of biodiesel program – 03/09/2023 – Market

In an attempt to block pressure from producers for an increase in the blending of biodiesel with petroleum diesel, associations representing the fuel, transport and automaker sectors released this Thursday (9) a joint letter asking for re-discussion of the law that encourages the use of biofuel .

The blend of biodiesel in diesel sold at gas stations was reduced to 10% by the Jair Bolsonaro government in 2021 to try to contain the rise in fuel prices at gas stations. According to the program’s original schedule, this year it should have been at 15%.

Producers have been moving around in Brasília to try to resume the original schedule and have already gotten statements of support from the Minister of Agriculture, Carlos Fávaro. In recent weeks, the dispute has gained tones of clash with mutual accusations between the two sides.

The joint letter released this Thursday accuses agribusiness of taking advantage of the demand for sustainable practices to “profit more” from the sale of a product that, according to them, has caused problems in fuel pumps and engines, both for trucks and generators.

The text is signed by nine entities, representing importers, distributors and fuel stations, vehicle and machinery and equipment manufacturers, and associations that bring together cargo transport entrepreneurs.

“There is no more time for guesswork (what is the most environmentally viable mix, after all?). Nor is it time, in the face of so many difficulties already faced, for the country to bow to the economic interests of a sector that, under the false pretext socio-environmental, just wants to profit more”, they say.

The associations say that the technological route used in the production of biodiesel in the country, called esterification, has generated problems such as the creation of sludge that damages automotive parts, fuel pumps, hospital generators, agricultural machinery and stationary engines.

“Another damage caused by sludge is the freezing and contamination of the input. Biodiesel crystallizes at low temperatures in engines when climatic situations involve temperature and humidity variation”, says the text.

They defend another technological route, known as green diesel, which is criticized by agribusiness. “The truth is that current biodiesel producers do not want to lose the easy and quick profit of ester-based biodiesel, nor do they want to invest in the modernization of the industrial process to produce green diesel”, they accuse.

Thus, the signatories of the letter ask for further studies to identify the impacts on the entire production chain, “from the engines of buses and trucks, through the diesel distributor and reseller, to the transporter”.

They claim that the mandatory blend is 7% in the European Community, 5% in Japan and Argentina, 1% to 5% in Canada and 5% in the United States. In Brazil, they say, the clean energy incentive program “has become a profitable business only for large producers”.

“Using the urgent attention to the environment and the adoption of sustainable practices –a real concern of all of society–, these economic agents seek to cover up their real interests: to guarantee a market reserve against competition from more modern biofuels.”

With the reduction of the mandatory blend of biodiesel and, soon after, the taxes on gasoline, the consumption of renewable fuels by the Brazilian fleet started to have more presence of fossil fuels, to the detriment of renewables.

Ethanol consumption in 2022 was the lowest since 2017. Biodiesel sales were brought down by the reduction in the mandatory blend in diesel and fell back to 2019 levels.