Ministry of Agriculture, Livestock and Food Supply - Embrapa

The biodiesel production capacity in the Center-South is estimated at
835.2-million liters p.a. by the end of 2007. At the present time there is only
one plant in operation in the region, in the State of Minas Gerais, with capacity
to produce 12-million liters per year. Nevertheless, the biodiesel production
should grow rapidly to approximately 125-million liters p.a., since another 13
units have already been built, albeit not yet commissioned. There are also
several other new plants or plant expansion projects underway, whose
production will total 698.2-million liters by the end of 2007 according to the
Ministry of Mines and Energy.
The region has very good potential to produce biodiesel from other crops,
such as peanuts, sunflower and castor beans. The experiments with castor
plants in the State of Mato Grosso and the research on the crop at the Instituto
Agronômico de Campinas have had very satisfactory outcomes, especially
with the so-called dwarf varieties, which not only are very productive in the
field (up to 4 tons of castor beans per hectare), but also enable the use of
mechanical harvesters.
In the Center-South as a whole and particularly in the states located in
the Center-West Region, large extensions of farmable land with appropriate
topography and optimum climatic regularity are still available. This means
that if biodiesel becomes the new business opportunity in Brazilian agriculture,
the Center-South, which already accounts for almost 80% of the national fuel
consumption, would have perfect conditions to expand its production base
very rapidly, as in the case of fuel alcohol.
Competitiveness of soybean for biodiesel
A comparative study of petroleum and soybean oil prices shows that
the average price of refined soybean oil has been US$ 69.00/barrel during the
last 15 years (Figure 12), which includes refining, domestic freights and other
commercialization costs.
A US$ 10.00 discount is considered reasonable to account for the various
elements that make up the price of eatable soybean oil, as opposed to soybean
oil for energy purposes, in addition to the cost of obtaining biodiesel. Thus, biodiesel
becomes competitive when the cost of petroleum is US$ 60.00 per barrel, given
the current conditions of technological development, managerial capacity,
production scale, market size, industrial plants, capital costs, taxes, and fixed
costs, among others. A consideration of the ethanol learning curve for the last 30
years leads us to conclude that this cost could be substantially reduced in the
medium term.
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