Key facts
- Paraguay's industry and commerce ministry (MIC) has reduced the mandatory biodiesel blend to 7%.
Paraguay's industry and commerce ministry (MIC) has reduced the mandatory biodiesel blend in diesel fuel to 7%, reversing a recent increase to 8% following concerns from fuel suppliers and distributors about potential technical risks to vehicles.
The decision reflects a balancing act between promoting domestic biofuel production and addressing practical concerns from the fuel supply chain regarding vehicle compatibility and maintenance, potentially impacting the country's energy policy and automotive sector.
Paraguay's industry and commerce ministry (MIC) has reversed its decision to increase the mandatory biodiesel blend in diesel fuel, cutting it back to 7% just four days after an 8% mandate had come into force. The ministry cited "new factors and studies" in its latest resolution, aiming to balance economic, quality, and environmental considerations.
The change represents a compromise following pushback from fuel distributors and blenders who had warned that most vehicle manufacturers in Paraguay do not recommend blends above 7%. They argued that higher concentrations could pose technical risks, potentially leading to engine and fuel system damage and increased maintenance costs.
The previous resolution, which mandated an 8% blend from July 20, was part of a strategy to promote domestically produced biofuels and stimulate the local vegetable oils industry. However, distributors claimed their concerns about technical risks were largely disregarded.
The new resolution sets the minimum biodiesel blend at 7% from July 24 through December 31, 2026. Compliance checks will be delayed by 60 days, and the mandate is scheduled to rise again to a minimum of 8% starting January 1, 2027.
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