Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Agriculture

Brazilian biodiesel, ethanol output advance on year in October

Agriculture | Grains

Unpacking the US-China phase 1 trade deal and what it means for Brazil and US soybean exports

Agriculture | Biofuels

Platts Biofuels Alert

Commodities | Biofuels

Geneva Biofuels Conference

Oil | Crude Oil

Libya faces major oil output shutdown as export blockade begins

Brazilian biodiesel, ethanol output advance on year in October

Highlights

Biodiesel, ethanol output on record pace in 2019

Biodiesel output rises to meet 11% mandate

Ethanol production strong despite slowing cane harvest

Rio de Janeiro — Brazil continued to boost biofuels production in October amid an ongoing push by the government to increase consumption as a means to reduce refined-product imports and meet the country's targets to reduce carbon emissions, according to National Petroleum Agency data released Tuesday.

The growing biofuels mandate included an increase in the volume of biodiesel mixed with diesel sold at the pump and a new carbon-credit system under the RenovaBio program launched earlier this year.

Brazil produced 582.7 million liters of biodiesel in October, an increase of 16.5% from October 2018, the ANP said. October's biodiesel output was also up 4.4% from September, the data from the National Petroleum Agency, ANP, showed. Brazil is on pace this year to top the previous annual record of 5.35 billion liters of biodiesel set in 2018, the data showed.

Biodiesel maintained the record-setting pace established earlier this year, benefiting from the implementation of an 11% biodiesel-diesel blend that went into effect September 1. The higher mandate had initially been expected to start March 1, but was delayed by motor tests. The increase was the latest in a series of annual bumps that will eventually push the mandate to 15% by March 2023, according to the Mines and Energy Ministry.

Each 1% increase in the biodiesel-diesel blend sold at the pump represents about 600 million liters of additional production per year, according to the Brazilian Biodiesel and Biokerosene Union, or Ubrabio, and Brazilian Vegetable Oil Industry Association, or Abiove. The two trade groups represent biodiesel producers in Brazil.

The government, meanwhile, expects the 15% mandate to increase Brazil's biodiesel output to an annual rate of 10 billion liters by end-2023.

About 77% of biodiesel production comes from soybeans, with 17% produced from animal fats and the remaining amount from raw materials such as cotton and recycled cooking oil.

HARVEST SLOWDOWN

Ethanol production also maintained the year-on-year growth seen throughout 2019, but retreated for a second-consecutive month as the sugarcane harvest season comes to a close, the ANP data showed.

Sugar mills produced 4.68 billion liters of ethanol in October, an increase of 42.2% from October 2018, the ANP said. October's ethanol production, however, was down 4.1% from September, the ANP said. Ethanol production is also expected to set a fresh record in 2019, topping the 33.1 billion liters produced in 2018.

Brazil's ethanol production will continue to slow through the end of the year as the harvest season ends. The next harvest season is expected to start in March 2020, depending on weather conditions. The outlook for the biofuel remains bright, with sugar mills expected to continue diverting more of the cane crush toward ethanol output in 2020 amid stable international sugar prices and strong domestic demand for ethanol.

Sugar mills produced 3.27 billion liters of hydrous ethanol in October, up 38.6% from October 2018, the ANP said. October's hydrous ethanol was down 7.6% from September, according to the ANP.

The strong ethanol output has led to ample supplies of the biofuel and made prices more attractive to motorists, stoking demand. Motorists typically favor hydrous ethanol when the price for a liter of the biofuel falls to 70% or less than the price of a liter of gasoline, which offsets the lower energy content of the hydrous ethanol.

About 90% of all new cars, trucks and light vehicles sold in Brazil are flex-fuel, meaning they can operate on hydrous ethanol, gasoline or any combination of the two fuels.

Sugar mills also produced 1.41 billion liters of anhydrous ethanol in October, a jump of 50.6% from October 2018, the ANP said. October's anhydrous ethanol production was also up 5.2% from September.

Growing domestic gasoline consumption amid an economic recovery in Latin America's largest economy in recent months was a key driver behind the increased anhydrous output. Gasoline sold at the pump contains 27% anhydrous ethanol.

-- Jeff Fick, newsdesk@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com