Brazil's BR Distribudora ready to sell biodiesel, awaits supply

By | March 01, 2005
In December, the Brazilian government put forth regulations that allow distributors to blend and sell B2 nationwide, in preparation for the blend becoming mandatory in 2007. If successful, the program may raise the blend to anywhere from B5 to B20 by 2012.

Having established a framework to integrate biodiesel into the national fuel supply, Brazil's next step will be to ramp up production to supply the pumps of distributors such as BR Distribudora, the distribution arm of Brazil's state-run oil giant Petrobrás.

The nascent biodiesel industry hopes that the program will ultimately follow the country's model ethanol program, which requires a 20 percent to 25 percent ethanol blend in gasoline sold at the pump, depending on the year's cane crop output.

The lower House passed the biodiesel decree, which already has the force of law, late in 2004. Final passage of the measure is still pending but expected to clear a Senate and full Congressional vote, and a final signature by President Luiz Inacio Lula da Silva. The president's center-left government is pushing the program as a way to provide income to small family farms in poor areas.

R Distribudora, Brazil's largest fuel distributor, is preparing to invest $20 million Brazilian reals ($1=BRL2.60) in 2005 to build storage tanks
with 18,000 cubic meters (18 million liters, 4.76 million gallons) capacity for the fuel.
"By February, the company will be fitted to receive, store and sell biodiesel in Belém and by July in other regions," BR President Rodolfo Landim said.

The Agropalma plant in Belém, Para state, will be up and running Mar. 1 to supply the northern region of the country, according to Agropalma General Manager Cesar Augusto Modest.

In addition to BR, other distributors are also interested in our product," Modesto said.
Likewise, Brazil's Ministry of Science and Technology expects commercial production of biodiesel to begin in July at the Brasil Ecodiesel plant to supply the major hubs in the northeastern region including the cities of São Luis in Maranhão state, Teresina in Piauí, Fortaleza and Crato in Ceará, and Salvador and Jequie in Bahia.

Production and supply of the center-west and southeast, the most populated and industrially developed region of the country, is forecasted for August when the Ecomat plant in Mato Grosso state is set to come on line. Around the same time, another plant is due to go on line in Londrina, Paraná, in the southern region.

Energy Minister Dilma Roussef said she expected production to reach 800 million liters (211 million gallons) in 2005. Brazil's National Economic and Social Development Bank (BNDES) approved a credit program in December to finance the green fuel's production.
"Brazil has a large number of products, such as soybeans, sunflower seed, castor beans and palm oil with which to produce biodiesel," Agriculture Minister Roberto Rodrigues said.

In addition to lowering emissions, use of locally produced biodiesel would also reduce diesel imports, estimated at 6 billion liters (1.6 billion gallons) annually or about 16 percent of total diesel consumption in the country.

Elizabeth Johnson is a freelance writer who has lived in Brazil periodically since 1986. She can be reached by e-mail at [email protected]
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