Brazil’s incoming government to revoke Bolsonaro’s biodiesel mandate decision

(Reuters) – Brazil’s incoming government will look to revoke a decision to keep the mandatory blend of biodiesel in diesel at 10% until March 31, 2023, a member of the transition team for President-elect Luiz Inacio Lula da Silva said on Tuesday.

Senator Carlos Favaro said the Lula administration would “reaffirm” its commitment with the biodiesel industry by keeping the blending mandate at a higher level than the current one, known as B10.

On Monday, President Jair Bolsonaro’s government decided to keep the biodiesel mandate at 10% for the first three months of 2023 before increasing it to 15% from April 1.

The decision angered the biodiesel industry, with producers association Aprobio saying it could represent a “death blow to the entire sector.”

The industry has been calling for reinstatement of a previous plan under which the mandatory biodiesel blend would stand at 14% in January and February of 2023 before reaching 15% in March.

But the Bolsonaro administration changed that plan last year when the failure of the soybean crop sent prices of the oilseed soaring, fueling local inflation. Soybeans represent some 75% of biodiesel content in Brazil.

“We already have a structure in place to revoke what will interfere with the new government,” Favaro said at a biodiesel event in Brasilia. The lawmaker, who is close to agribusiness interests, was tapped earlier this month by Lula’s team to participate in the government transition.

“We will reaffirm our commitment to the sector, which is of fundamental importance for agribusiness and the environment,” Favaro said.

Brazil has been gradually increasing the mandatory blend of biodiesel in diesel in order to cut greenhouse gas emissions.

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