Brazil methanol demand to soar 13% on biodiesel

12 September 2007 00:09  [Source: ICIS news]

HOUSTON (ICIS news)--Brazilian methanol demand could jump 13% to 680,000 tonnes/year by 2009 as nationwide biodiesel blending gets underway, a methanol producer said on Tuesday.

 

Methanol is used as a reagent in the production of biodiesel.

 

Blending of biodiesel into diesel will become mandatory in Brazil on 1 January, 2008. The blend is currently set at 2% from 2008 through 2012. The blend level will jump to 5% in 2013, according to legislation approved in 2005, and some industry sources believe the level could be increased before then.

 

Brazil’s methanol demand will increase by another 120,000 tonnes/year once the country adopts the 5% blend level, the producer said. However, given the rapid growth of biodiesel production in Brazil, the higher blend could be required as soon as 2010, the producer said.

 

Brazil’s methanol market is now estimated at 600,000 tonnes/year, or about twice the current domestic production capacity. About 300,000 tonnes/year is imported, mostly from Chile.

 

The growth in demand from the biodiesel sector represents a significant business opportunity for the local industry, the producer said.

 

Brazil’s biodiesel capacity was at 924m litres/year in August, according figures from the National Petroleum Agency (ANP). Production capacity is expected to soar to 2bn litres/year by end-2007, with the construction of more than 50 plants.

 

Brazil currently uses 40bn litres/year of regular diesel.

By: William Lemos
+1 713 525 2653

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