After the recent announcement requiring diesel vehicles to run on 5% biofuel mix from 2010 onwards, the Brazilian government now sets its eye on implementing 20% biofuel blend by 2015.
Brazilian government’s decision to steadily increase the volume of biodiesel in diesel to 20% in big cities by 2015 has received wide appreciation and welcome by country’s biodiesel manufacturers, as per the news published by
CommodityOnline.
Brazilian Biodiesel Union revealed that their manufacturing plants would be able to provide the new biofuel from 2010 onwards, which would suggest an increase of 2,500 Million Liters. It is learnt that in October 2009, the government had announced that the diesel fuel vehicles in the country would be required to run on a 5% biodiesel blend with effect from January 2010. In such a scenario, Brazil will surpass the US and France to become the second-largest producer of biodiesel after Germany.
The biodiesel industry in Brazil started growing after 2005, following the introduction of 2% biodiesel law, which was not mandatory. As a result, biodiesel production in Brazil started increasing. Later, in January 2008, the law was mandated by the government to match up the demand, thus further boosting the production levels to 308.31 Million Gallons in 2008, reveals “
Global Biofuel Market Analysis”, a market research report by
RNCOS.
As per the estimates of the Ministry of Mines and Energy, total biodiesel output in Brazil was expected to reach 1,800 Million Liters in 2009. The Ministry has also predicted that the country’s biofuel production would hit somewhere around 2,400 to 2,600 Million Liters by 2010.
Brazil, a pioneer in biofuel, started producing biodiesel on a large scale in 2003, following the start of the first presidential term of President Luiz Inacio Lula da Silva. This led to the expansion of the biodiesel market, with 43 plants in operation at present and an annual production capacity of 3.6 Million Liters.
According to a Research Analyst at
RNCOS, “Biofuel that is added to diesel is normally extracted from soybeans, castor beans and other oilseeds. Thus, increased extraction of biofuel from agricultural produce would lead to tremendous increase in agricultural production. Particularly, the cultivation of dende palm coconuts, castor beans, cottonseeds, soybeans and sunflower seeds is expected to grow substantially. However, if enthusiastic farmers stick to overproduction, the market could face inflation and downward price pressures.”
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