Brazilian B2 mandate in effect today; officials aim for B3, B5

In Brazil, the B2 biodiesel mandate takes effect today.

Brazil’s Minister of Mines and Energy, Nelson Hubner, estimated that the country would save $511 million in imported diesel as a result. He added that he hoped to move to B3 in 2008 and B5 by 2013.

Petrobras recently announced that it will construct 10 new biodiesel plants between now and 2012, in addition to three already announced for opening next year. Total project cost for the 13 facilities is projected at $507 million and planned capacity is 225 Mgy. The initial three plants, scheduled to open in March 2008, have a planned capacity of 48 Mgy.

Petrobras commenced marketing biodiesel in the past few months, and the company has made sales to date of 41 Mgy, primarily in Rio Grande do Sul. Petrobras will market a total of 100 Mgy which is estimated to cover Brazil’s consumption of biodiesel for the first half of 2008. Brasil Ecodiesel has a 62 percent market share in the Brazilian biodiesel market.

On the ethanol side, Petrobras announced a slowdown in their expansion strategy as Japan struggles to expand ethanol demand. Earlier, the state oil company had announced plans to build 20 ethanol plants in Brazil in cooperation with Mitsui. Now, the company is going ahead with only three pilot projects until Japan’s market growth rate becomes more clear.

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