Brazilian city tests biofuel as a full diesel alternative

A city in southern Brazil is increasing the use of a new biofuel in its municipal fleet as tensions in the Middle East disrupt global energy markets and raise concerns over diesel supply.

Passo Fundo, in Rio Grande do Sul, is deploying a diesel alternative made from soy, animal fats and used oils. Unlike Brazil’s conventional biodiesel blend of 15%, the new fuel is designed to fully replace diesel in existing engines, lowering emissions and potentially cutting costs.Brazilian biodiesel producer Be8 received approval in late 2024 to manufacture the fuel, called BeVant, in Passo Fundo, with an initial annual capacity of 28 million litres.

The company said the fuel can be used in standard diesel engines without modification. Mayor Pedro Almeida said the fuel offers some relief as crude prices rise due to the U.S.-Israeli war on Iran, which has raised fears of diesel shortages in Brazil.

He said the alternative has strong competitive potential.Neither the mayor’s office nor Be8 disclosed the current price of BeVant, though the company said it is about 15% costlier than biodiesel but cheaper than HVO, or green diesel.

The city expects prices to decline as production increases and plans wider use across its fleet. In the first phase, 17 vehicles, including trucks, backhoes and a minibus, will use around 10,000 litres per month. Brazil imports about a quarter of its diesel needs and is heading for a record soybean harvest, prompting industry calls for higher biodiesel blends.

Be8 CEO Erasmo Carlos Battistella said the company is expanding discussions with firms seeking to reduce emissions. Beyond Passo Fundo, BeVant is also being used in the Copa Truck racing series, as well as by logistics companies and municipal bus fleets.