Biofuel producers and distributors in Brazil are cautious about whether the upcoming deadline to raise the mandatory biodiesel blend in diesel can be met, UkrAgroConsult reported.
The increase from the current 15% blend to 16% (B16), scheduled under the Fuel of the Future law to take effect in March, still depends on feasibility tests to ensure safety and performance, along with final approval from the National Energy Policy Council (CNPE).
Diesel distributors and biodiesel producers widely believe the March target is unlikely to be achieved. A source from a major biodiesel producer said the chances of a blend increase next month are “very remote,” adding that implementation may instead occur in the early second half of the year, similar to 2025 when the rise from 14% to 15% was delayed from March to August.
Some market players also point to Brazil’s presidential elections in October as a potential factor behind further delays, noting that higher biodiesel blends could raise diesel prices and create inflation risks ahead of the vote.
Distributors are already finding it difficult to pass on higher costs to consumers, as diesel demand remains weak at the start of 2026 and the soybean harvest — a key source for biodiesel — has yet to peak. One analyst said indications suggest the increase may not happen this year, highlighting that more than 70% of biodiesel is produced from soybean oil, which could influence prices.
Analysts at S&P Global expressed skepticism that the government will move forward with a higher mandate in 2026, warning that blending decisions are often influenced by political considerations rather than purely technical factors. Their research currently assumes the B15 blend will remain in place throughout the year and forecasts supply exceeding 11 million cubic meters, which would mark a record.
Despite industry concerns, some officials are confident the timeline can still be met. Federal deputy Alceu Moreira, president of the FPBio biodiesel caucus in Congress, said an election year makes it even more important for the government to implement policies with environmental benefits.
“There is no reason not to increase the blend in March,” Moreira said, adding that efforts would continue to keep the schedule on track.
However, feasibility studies still require field testing and updates to comply with anti-pollution rules, making the March deadline “highly challenging,” government officials have indicated.
Biofuels producers’ association Aprobio has urged the Ministry of Mines and Energy to adhere to the Fuel of the Future law and accelerate testing for B16. The group expects further discussions with authorities soon.
Aprobio president Jerônimo Goergen warned that following the current timetable would lead to delays, as reports on the feasibility tests are expected only by July or August 2026 and could slip to January 2027 if additional technical or regulatory adjustments are needed.
There is currently no official confirmation that the testing schedule has been finalized or begun, raising the possibility of further setbacks.
If the increase is postponed, Aprobio expects an immediate economic impact on producers who had anticipated stronger biodiesel sales. However, the association does not foresee widespread cancellation of expansion plans or soybean crushing projects already announced, though some new projects could face delays.
The group maintains that biodiesel must be embraced by Brazil’s agribusiness as a value-added product and views higher blending mandates as essential for the sector’s growth. It also sees potential opportunities in international markets, including applications for hydrotreated vegetable oil (HVO), sustainable aviation fuel (SAF), and other alternatives.
