Biodiesel producers complain that withdrawals from the product at some plants in December were less than expected in contracts with distributors.

According to industry associations, 85% of the volume forecast for the month, auctioned at Auction 76, which took place in October, was effectively withdrawn by distributors until this week. In November, the month also included in the event, the percentage was 95%, which is the minimum established between the parties.

The National Agency of Petroleum, Natural Gas and Biofuels (ANP) stated to Valor that, according to its monitoring, until December 28, the withdrawals were equivalent to 94.7% of the contracted biodiesel, contrary to the estimates released by the producers.

According to André Nassar, executive president of the Brazilian Association of Vegetable Oil Industries (Abiove), the expectation of increased demand for fuels in the country did not materialize in December, and that, therefore, the distributors removed less biodiesel. According to him, the reduction affected the planning of some plants and increased costs with raw materials, hedge and with the shutdown of factories.

"The producers do not have the storage capacity to load two months of biodiesel. Companies had to stop because, if they produce and there is no withdrawal, there is no way to load that stock. It is a serious problem that has turned into a cost," he warned. "The average was 85% withdrawal, 10 percentage points below the 95% minimum withdrawal, provided for in the contract," he guaranteed.

Among Abiove's associates, which account for about 30% of the Brazilian biodiesel market, 122.5 thousand liters of biofuel were purchased to be removed in December, but the output was 104 thousand liters until the 27th. In November, the withdrawal reached 95.7% of the 137.7 thousand liters contracted.

The situation is the same among the companies of the Association of Biofuel Producers in Brazil (Aprobio), which showed an average of 86% withdrawal. In some plants, the volume was only 74%, says Julio Minelli, superintendent director, who complains about the "instability" in the negotiations. In specific cases, there were withdrawals above the contract, which imposed an expansion of production.

Abiove and Aprobio asked the government to raise the mandatory mix, from 11% to 12%, in the second half of December to "dry up" these stocks, but the suggestion was denied by the ANP, with the approval of the Ministry of Mines and Energy.

The agency stated that it rejected the request "due to the imbalances that this unexpected change in the percentage could generate in the market, as distributors with no contractual balance to be executed enough to face the new need for biodiesel, for example". At the time, the producers were informed by the government that of the 41 plants participating in the auction, 14 had withdrawn volume below 90% --- five of them with rates below 75%, according to Minelli.

Now, entities in the biodiesel segment want a review of the application of fines to distributors that do not withdraw the contracted volume. "There is no effective instrument of punishment. The fine is insufficient and does not solve the problem," said Nassar.

Aprobio's Minelli says that the distributors are postponing the removal of biodiesel until January, when the volume purchased at Auction 77, held in December, when there was an average discount of 20% in the price of the biofuel, becomes effective. "They are preferring to consume stocks and not withdraw from the mills to withdraw later with a cheaper price", he criticized.

The Brazilian Petroleum Institute (IBP), an entity that gathers the largest fuel distributors in the country, such as BR, Ipiranga and Raízen, told Valor that companies "continue to follow the rules of the current biodiesel commercialization model" in the country, but that await the evaluation of new guidelines, with the evolution of the auction model under study by the ANP.

The fines for failure to withdraw are foreseen in the contracts signed between Petrobras, the producers and the distributors, and correspond to 10% of the value of the contracted biodiesel multiplied by the outstanding balance of the contract above 5% due to the responsibility of one of the parties. "So far, these contractual provisions have been sufficient for the program to function properly," noted the ANP.

At Auction 76, in October, 1.1 billion liters of biodiesel were purchased for removal in November and December, with an average price of R $ 5.552 per liter. Of these, 520.7 thousand liters were removed in November (almost 95% of the 552.6 predicted for the month), according to ANP data. In the following event, which defines the withdrawals of biofuel in January and February 2021, 1.18 billion liters were traded at R $ 4.425 per liter.