Brazil reports more off-spec biodiesel March-April

The rate of Brazilian biodiesel falling below required blending limits nearly tripled in March and April after the mandate was increased to 14pc, according to a government analysis.

Hydrocarbons regulator ANP's Fuel Quality Monitoring Program (PMQC) found 271 instances of biodiesel below the required level between 1 March — when the blending mandate was increased from 12pc to 14pc — and 30 April. In January and February the PMQC found 97 instances of blends that did not meet the 12pc level.

An increase in missed blending targets is common during transitions to higher blending levels, according to the agency, mainly due to difficulties in depleting inventories of the lower-level blend.

Several plants claim that a slowdown in biodiesel withdrawals in the first four months of the year also contributed to challenges in complying with the new blending level. Some retailers' loss of market share has also been cited as an aggravating factor.

In March, 154 recorded instances of non-compliance covered blending levels between 12.3pc and 13.9pc, according to ANP data. In April, there were 101 occurrences within the 12.3pc and 13.9pc range. Another eight instances of non-compliance were also recorded in each of March and April.

The PMQC is a monitoring program and does not have the same effect on market behavior as inspections, according to ANP. "It is used as one of the intelligence vectors for the planning of ANP's inspection actions," the agency said.

Only irregularities identified in the context of inspectios can result in fines levied against fuel distributors.

By Alexandre Melo