September 2009

Brazil Increases Diesel Fuel To A B4 Blend (4% Vegetable Oil)

Starting on July 1st, diesel fuel sold in Brazil will now be B4, which means that the fuel will contain 4% vegetable oil. Brazil started adding vegetable oil to its diesel fuel in 2007 and the program has grown steadily ever since. This program is seen a win-win for all participants. It reduces petroleum imports, it boosts the local economy, it adds value to vegetable oil producers, it reduces harmful emissions from diesel engines, and it’s an integral part of Brazil’s overall plan to be energy independent. As we have reported before, Brazil now uses more ethanol than gasoline in its automobile fleet. The trucks in Brazil still use 96% diesel, but that percentage is dropping as the biodiesel program continues to expand in Brazil.

Soybean oil is the primary oil used to make the blend because only soybean production has the volume and infrastructure in place to meet the volume requirements. The government is trying to diversify the type of oils suitable for the blending by promoting the production of other oils especially in the northeastern part of the country. Northeastern Brazil is the poorest part of Brazil and the agriculture in that part of Brazil is dominated by small family farms. The biodiesel program is one of the ways the government is trying to help the economy of the region.