Brazil starts 79th biodiesel auction after lowering obligatory blending mandate to 10%

Lucas Hall

15-Apr-2021

HOUSTON (ICIS)–Brazil started its 79th biodiesel auction on Wednesday after the Brazilian National Agency of Petroleum, Natural Gas and Biofuel (ANP) temporarily suspended it on 6 April amid elevated biodiesel prices in the country.

The auction is expected to finish by the end of the week.

The auction is being held after the government decided to temporarily reduce the obligatory blending mandate of the biofuel into diesel during the May-June delivery period from 13% to 10% on 9 April.

Glycerine sources said the temporary reduction in the blending mandate is expected to reduce Brazil’s glycerine supply by 13,000-15,000 tonnes/month during the delivery period.

This volume is equal to the approximate volume of glycerine exported from the country to China monthly, said a major trader.

Fuels demand in the country is weak and inventories high amid coronavirus-related lockdowns and other movement restrictions.

China’s demand for glycerine has been strong amid tight supply and robust demand for downstream epichlorohydrin (ECH) to produce epoxy resins for the construction sector, which is booming as the country recovers from the pandemic.

Biodiesel is an alternative fuel used in diesel engines produced from renewable resources. The most commonly used feedstocks are palm, soy and rapeseed oil.

Glycerine is mainly used in personal and oral care products such as skincare creams, toothpastes and mouthwashes, as well as food products either as glycerine directly or one of its derivatives such as glycerol mono-stearate.

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