The recent increase in diesel prices which Brazil experienced has led people to start discussing the requirement that biodiesel must be mixed with diesel fuel. The experts together with industry professionals recommend that they should raise the biodiesel blend percentage to strengthen the country's energy independence.
The Ministry of Mines and Energy (MME) of the Brazilian government announced its intention to test the technical feasibility of higher biodiesel blends during the initial six months of 2026. The industry which includes 43 different organizations together with the biodiesel industry has requested faster increases to the biodiesel blend percentage because of rising diesel prices and Middle Eastern geopolitical conflicts.
The MME announced that testing will start in 2026 after all testing resources and institutional agreements and essential budget and technical components become accessible. The MME announced through a note to Broadcast Agro that testing will start in 2026 after all testing resources and institutional agreements and essential budget and technical components become accessible.
The government of Brazil through Minister of Mines and Energy Alexandre Silveira has announced that testing needs to happen before any increases to the current 15% biodiesel requirement (B15) will receive approval. The Future Fuel Policy establishes that any blends above B15 can only proceed after showing their technical viability. The current schedule anticipates B16 from March 2026 which will advance to B20 by March 2030 after this technical validation.
The MME further clarified that the tests are awaiting the "formalization of financial execution and the transfer of resources to participating institutions," a crucial step for initiating experimental activities. The testing plan is a collaborative effort involving automakers, system suppliers, transporters, biodiesel producers, fuel distributors, universities, research institutes, and government agencies.
Industry Pushes for Higher Blends
The biodiesel sector, represented by the Parliamentary Front for Biodiesel (FPBio), is actively lobbying for an increase to 17% (B17) and views government subsidies for imported fossil diesel as a strategic misstep. The FPBio argues that such subsidies deepen Brazil's dependence on a fuel susceptible to geopolitical crises and price volatility, rather than reducing energy vulnerability.
Daniel Furlan Amaral, who directs economics and regulatory affairs at the Brazilian Association of Vegetable Oil Industries (Abiove), demonstrated how diesel price increases make a major impact on agricultural production costs and logistics for his industry. "Diesel is essential for the operation of machinery in the field and also for transporting production. When the price rises, rural producers' margins are pressured, especially in an already challenging time for the sector," Amaral explained.
The biodiesel sector wants to increase its biodiesel blend because it will help reduce their current risks while creating demand for domestic soybean processing which serves as the main biodiesel feedstock in Brazil. Amaral states that higher blending ratios will lead to reduced fuel costs at gas stations, depending on oil price fluctuations.
Production Capacity and Global Context
The demand for biodiesel in 2026 will reach 10.5 billion liters if the current B15 blend continues to be used. The authorization to increase the blend to B16 starting in July will raise consumption levels to about 11 billion liters which will require soybean oil demand to grow from 6.8 million tons to 7.1 million tons.
Brazilian industries can operate at higher blend levels because they possess both the necessary installed capacity and the required raw materials to produce B17 and B18. "The sector has enough supply to meet current demand because it operates with extra production capacity. The industry needs only to receive environmental approval to start its production expansion," Amaral said while he dismissed the supply chain problems that the Civil House Minister Rui Costa had mentioned.
Experts acknowledge that domestic diesel prices remain competitive but they also warn about potential future price increases. A higher biodiesel blend will protect Brazil from external market changes and supply disruptions which will decrease its risk from geopolitical disputes that affect global energy markets.
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