Federal Government of Brazil: Government Establishes New Model for Biodiesel Stock

On April 8, the Ministry of Mines and Energy (MME) published an ordinance in the Official Gazette establishing a new model for strategic stocks of biodiesel in the country. A new feature is the "purchase option" method of acquisition which is used in other sectors. With this, buyers of biodiesel (essentially, Petrobras) contract the right to take the product when necessary, at any time, and plants are required to conclude the business at the agreed price.

Biodiesel will continue in the regular stocks of producers. "With this measure, we avoid degradation when the product is stored for long periods of time. It also eliminates physical transportation from the plant to Petrobras. In the event safety stocks need to be consumed, biodiesel will come directly from the producer to the distributor," the MME explained. According to the ministry, the new model for biodiesel stocks seeks to reduce costs and improve the efficiency of product logistics.

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