Brazil's biofuel, farm lobbies push for reversal of blending decision

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SAO PAULO, Dec 1 (Reuters) - Brazil's powerful biofuel and farm lobbies are pushing the government to reverse a measure announced this week that maintained the minimum biofuel content level in diesel at 10% for all of 2022.

"Lawmakers of the biodiesel caucus will act. As soon as the president learns of the repercussions of the measure, and he will certainly change his stance," Francisco Turra, board chairman of the Aprobio biofuels lobby, told Reuters in an interview on Wednesday.

A 10% mix represents a drop from the 13% requirement initially planned for 2021, and an even sharper fall from the 14% that was supposed to be adopted from March 2022, Turra said.

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"There is a huge loss of the investments made and of jobs that would be generated," Turra said.

In September, Brazil's National Energy Policy Council (CNPE)cut the minimum biofuel content requirement to 10% from 13% previously, citing a rise in the price of soybeans, which represent some 75% of biodiesel content. read more

But lowering the biofuel mix in diesel is irrelevant to the its final price, the industry says.

Crushers' lobby Abiove estimates the sector will domestically process around 6 million tonnes fewer soybeans next year with the reduced mandatory blending. Brazil would also see a 1.2 million-tonne drop in soyoil and a 4.8 million-tonne drop in soymeal production in 2022, affecting the meat industry, Abiove data show.

Soy grower group Aprosoja supported the government's decision to reduce the mandatory blending in 2021, but said the measure was unjustified now as Brazil is looking to harvest a record crop in 2022.

"The reduction in demand for soyoil can harm the sector and negatively affect prices," Aprosoja said. "The industry hopes the government reverses the decision [to maintain a 10% mix] as soon as possible."

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Reporting by Roberto Samora and Ana Mano Editing by Mark Potter

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