Brazil‘s biodiesel consumption down to half of production capacity this year

Rodrigo Rodrigues, assistant deputy at Brazil’s Executive Office Secretariat, revealed that Brazil is expected to consume biodiesel equal to less than half of its production capacity this year. Speaking at the BR 2012 International Biodiesel Conference in Sao Paulo, Rodrigues said that Brazil’s current installed capacity annually supplies 6.6 billion liters (1.743 billion gallons) of biodiesel to the domestic market. But demand this year is expected to reach only 2.6 billion liters.
Rodriguez attributed the disparity between biodiesel capacity and consumption to the price difference between conventional diesel, which is cheaper, and biodiesel which is much more expensive. He said that during the last auction held by the government, conventional diesel was sold at BRL1.45 (US$0.715) a liter, while biodiesel sold at BRL 2.70 a liter (US$1.30). Another concern, according to Rodrigues, is the over-concentration of biodiesel production in Brazil’s mid-west and south. The mid-west accounted for 42.3% of the domestic biodiesel supply between January and July this year, while the Southern region produced 36.8%. Only 9.3% was produced in the southeast. (October 2, 2012)