With China signaling that it will expand imports of soybean meal from Brazil, companies (tradings) are already planning to meet this new demand. Thus, the Brazilian government will have to anticipate the decision to expand biodiesel production internally. If it does not, it could create imbalance in the soybean oil market and inhibit the crushing of soybeans in grain in the future, with repercussions for animal protein producers - pigs, fish, chickens and eggs. The alert is from the Joint Parliamentary Front of Biodiesel (FPBio), a suprapartisan movement of the National Congress.

The increase in Chinese purchases of bran will result in crushing of a larger volume of grains. However, fpbio says, in this crushing process, in addition to bran, soybean oil will also be produced, without economic destination forecast. That is, there will be an oversupply of oil, with consequent fall in price. And this will inhibit the crushing chain, which will no longer see enough profit in this activity. Bran is essential for the production of animal protein and this market will also be affected.

The immediate solution to avoid this scenario, according to FPBio, is for the federal government to authorize the increase of the mixture of biodiesel to mineral diesel beyond the current 10%. This will move the production of this biofuel, which is produced with about 75% soybean oil. "Thus, biodiesel will fill this gap and generate a perfect combination, with more demand for bran and also for soybean oil," says João Henrique Hummel, executive director of FPBio.

The country can adopt a mixture of up to 15%, as provided for in the schedule of the National Energy Policy Council (CNPE), an agency formed by ministries of the federal government. The CNPE, however, has established a 10% content for 2022, as a way to avoid any pressure on the price of diesel in the pumps, which is no longer justified. However, last week, The Minister of Mines and Energy, Adolfo Sachsida, declared that changes in the mixing content should be addressed with the transitional government.

House of Representatives will anticipate the federal government

Before the government evaluates the issue, FPBio will put this and other biodiesel-related issues under national discussion in the House of Representatives, Hummel says. On November 22, the Front will organize a seminar, in order to gather suggestions from parliamentarians, party leaders, entrepreneurs, academics and other actors so that the federal government will renew its commitment to the National Program for the Production and Use of Biodiesel, with the aim of accelerating the energy transition, with reduction of the use of fossil fuels - a topic now under discussion at COP 27 - united nations conference on climate change,  in Egypt.

The country has 57 plants authorized to produce biodiesel, ahead of billion-dollar investments in the 5 regions. The production chain of the sector generates business and income for 74,000 families of family farmers, that is, almost 300,000 people. According to FPBio, this whole chain has seen its business prospects dehydrate since the CNPE decided to fix the content of the mixture at only 10%. Registration for the FPBio seminar "Biodiesel externalities" are free of charge (link here).

Source: Folha Vitória