The Minister of Mines and Energy, Bento Albuquerque, said yesterday, in a webinar at Biodiesel Week, an event promoted by the Brazilian Biodiesel and Bioquerosene Union (Ubrabio), that the percentage of mixture of biofuel in fossil diesel sold in the country will be reduced by 12% to 10%.

According to Albuquerque, in this month of August, during the L75 auction [75th Biodiesel Auction], there was "an imbalance in the biofuel offer in view of the demand for the next two months", as highlighted by the Reuters agency. "Thus, we have come to the conclusion that there will not be enough volumes to meet the 12% mixing percentage for the months of September and October".

Although the minister made a point of stating that the measure did not characterize a decrease in the relevance of the "successful" mixing policy for the federal government, the announcement took the segment by surprise and generated a flood of criticism from the production chain.

The Brazilian Association of Vegetable Oil Industries (Abiove), which represents major grain traders operating in the country, regretted the decision of the MME and the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

In a note, the entity said that the lack of biodiesel can only be proven after the fulfillment of what is foreseen in the notice. In other words, after the completion of the L75, which remains paralyzed, and a complementary auction was held, if in fact it was shown that sales would be insufficient.

"There was a commitment by the MME and the ANP that, whatever the decision, this would be officially communicated to the sectors involved to avoid speculation in the market. Unfortunately, there was a public communication before the sector was informed", complained Abiove.

Having announced the reduction of the mixture to 10% before the end of the L75, said the entity, the official bodies may be neglecting 1.16 million m3 commercialized in the stages already carried out of the L75. "The industry does not accept the cancellation of sales made, since this action would cause a collapse in the soy production chain and in the sale of oil, given that the raw material has already been sold. There are also commitments signed with the sales of soy bran" , said.

Juan Diego Ferrés, president of Ubrabio said that the factors that determined the reduction are not necessarily related to the main problem, which is "the global imbalance that we have in the soy complex". "[The decision] brings an account for biodiesel that is not his".

Erasmo Carlos Battistella, president of the Association of Biofuels Producers of Brazil (Aprobio), stated that the entity will forward a letter to the MME and the ANP asking that the interrupted auction be resumed from where it left off so that companies that have already signed deals are not harmed. Representatives of the segment also seek support in Congress to reverse the measure.