More Biodiesel for World Cup

Brazilian farmers hope 20% biodiesel blends gain foothold

The Brazilian on the other end of the phone said he'll be glad to be traveling abroad during the coming World Cup games there, starting June 12. And, while soccer is easily that country's number-one pastime, this guy was not completely alone in his concern about unfinished stadium projects and the like.

Brazil's soybean and beef producers, on the other hand, have reason to celebrate just now. When the 2014 World Cup games begin, urban buses in host cities will run on a 20% biodiesel blend as a way of reducing the World Cup Games' Greenhouse Gas footprint. Both crushers and farmers hope this will show that higher biodiesel blends work.

As if the chance to show off its biodiesel prowess on an international stage weren't enough, Brazilian President Dilma Rousseff put the icing on the cake. She just issued a decree that will up the national mandatory biodiesel blend—with or without the World Cup Games—from the current 5% to 6%. Then, come November, the blend will go up to 7%. It's "an important step" for the soybean industry, said Brazil's oilseed crushers in a news release.

Excess capacity
The country has been running on a 5% biodiesel blend since 2010, but the Brazilian biodiesel industry has excess capacity. One expert said, at a recent industry forum, that the industry has been running with an excess capacity of 50% for the last six months. So while Brazilian manufacturers made 772,000 gallons of the stuff in 2013, they could have produced twice that—something which some world soybean competitors would have liked to have seen happen. After all, the prime battleground for Brazil-U.S. bean competition these days is China, and China wants whole beans.

Farmers and crushers also argue that higher biodiesel blends would save government money—at exactly a time when some Brazilians are hitting the street in protest over World Cup spending, arguing it diverts from investment in social issues. With short refining capacity, it is said more than 20% of Brazil's petroleum diesel comes from abroad. And, to keep official inflation numbers lower, the head of the crushers' association there says that diesel is sold by the government's national petroleum company at a loss. Greater biodiesel blends would cut some of those money-losing imports.

Soybean oil makes up about 80% of Brazil's biodiesel feedstocks, followed by beef tallow and inedibles such as castor and jatropha curcas. So the more biodiesel consumed at a world venue like the World Cup, the happier farmers and crushers will be—even if a few check into a hotel in Miami during the games.

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