Policy, regulation, development and future of biodiesel industry in Brazil

This article provides a detailed analysis of the Brazilian biodiesel market and policies over the past 16 years. The biodiesel market faced distinct periods, from the initial non-mandatory 2% to the actual 13% mixture in diesel. The legal and regulatory basis of the Biodiesel Program, as well as the tax benefits to poorer regions and family farmers, was also explained. The biodiesel industry increased from almost no biodiesel production in 2005 to more than 4 billion liters at the end of 2017. Soybean oil is the major raw material in Brazilian biodiesel (around 90%), although fats are also important. Other materials, such as sunflower oil, peanut oil, castor oil, palm oil (mainly in North and Northeast regions) and used oil (especially in the Southeast region) showed increased participation. Biodiesel content could reach 15% in 2023. That increase can lead to an expansion in biodiesel demand to 9 billion liters in 2024, which will need soy processing improvement, in order not to take place at the expense of an increase in deforestation and smallholder agriculture. Some recent events, such as the reduction of oil prices and the pandemic of Covid-19 can diminish the rate of that expansion.