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South America biodiesel production capacity in 2026 is estimated at approximately 12 to 15 million tonnes per year, positioning the region as one of the largest biodiesel producers globally. Capacity growth is driven primarily by domestic blending mandates, energy security objectives and agricultural value chain integration rather than discretionary fuel demand. Expansion trends favour incremental capacity additions, plant debottlenecking and feedstock flexibility upgrades over large scale greenfield investments.
Production leadership is concentrated in countries with strong oilseed output, established biodiesel policies and integrated agribusiness infrastructure. Brazil dominates regional capacity supported by soybean oil availability and consistent blending requirements. Argentina remains a major producer with a strong export orientation, while Colombia and Paraguay expand capacity to support domestic mandates. Several smaller economies rely on imports due to limited feedstock processing capability.
Demand stability is reinforced by mandated blending programs and domestic diesel consumption. Buyers prioritise regulatory compliance, feedstock traceability and cost predictability.
Soybean oil based biodiesel dominates regional output due to feedstock availability. Export grades require tighter quality control and certification compared with domestic mandate supply.
Process economics are highly sensitive to feedstock pricing and conversion efficiency. Plants with flexible feedstock capability demonstrate stronger resilience during agricultural price volatility.
Domestic road transport blending accounts for the majority of consumption due to mandated usage. Export demand introduces volatility tied to international policy and trade conditions.
Brazil leads regional biodiesel production supported by soybean supply, national blending mandates and integrated agribusiness networks.
Argentina maintains strong capacity with a significant export focus, though policy variability influences utilisation rates.
Colombia expands biodiesel output aligned with palm oil availability and domestic blending programs.
These countries show moderate growth driven by domestic fuel needs and agricultural output.
Several nations rely on imports or limited domestic production due to feedstock constraints.
The biodiesel supply chain integrates agricultural production, oilseed crushing, biodiesel conversion, storage and regulated fuel distribution. Feedstock logistics and storage play a critical role due to seasonal harvest cycles.
Key cost drivers include vegetable oil pricing, methanol costs, energy use and compliance expenses. Trade flows connect Argentina and Brazil with export destinations, while intra regional trade supports supply balancing.
Contracts are typically structured around mandate compliance, indexed feedstock pricing and quality specifications.
The ecosystem includes farmers, oilseed processors, biodiesel producers, fuel distributors, regulators and export traders. Biodiesel acts as a policy driven bridge between agriculture and energy sectors.
Strategic themes include feedstock diversification, policy stability, carbon intensity tracking and integration with renewable diesel pathways.
South America biodiesel production in 2025 is estimated at approximately 12 to 14 million tonnes, driven by domestic blending mandates and export activity.
Pricing is driven by soybean oil costs, methanol pricing, energy inputs and regulatory compliance expenses.
Mandates create baseline demand but expose producers to political and regulatory risk.
Soybean oil dominates due to regional agricultural scale, established crushing infrastructure and cost efficiency.
Brazil and Argentina are the most influential due to production scale and export capability.
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South America Biodiesel Global Production Capacity and Growth Outlook
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