Soybean-Based Fuel Is The New Bet For Decarbonizing Transportation, As Well As Reducing Prices Of These Grains And Their Derivatives In The Global Market

The Development of the New HVO Fuel, Launched in the United States, Will Not Only Bring Strong Benefits to Decarbonizing the Transport Sector, with the Reduction of Gas Emissions, but Will Also Enable a Decrease in Soybean Prices and Its Derivatives.

The global energy and transport market is witnessing the arrival of a new competing product in the segment: HVO fuel (Hydrotreated Vegetable Oil), produced from soybeans and already in the experimental phase in the Baltic and Scandinavian countries. The product promises to significantly reduce pollutant gas emissions and contribute to the decarbonization of the sector while also providing a decrease in soybean prices and its derivatives.

Transport Sector May Utilize HVO Fuel in the Race for Decarbonization, While Agribusiness Benefits from the Reduction in Soybean Prices

The global market is increasingly focused on the demands of decarbonization and energy transition in transport operations, and entire countries are investing in new solutions and technologies for the sector.

In this way, HVO fuel, recently launched in the United States and already in testing phases in more countries, can be the new bet for the future of the transport sector, in addition to having a strong impact on agribusiness.

HVO fuel is also called hydrotreated or hydrogenated oil and hydro-biofuel, and it uses hydrogen instead of methanol — as is the case with biodiesel — for its catalysis. Thus, it ensures up to 90% reduction in carbon dioxide emissions in the atmosphere, thereby contributing to the decarbonization of transport operations worldwide.

Furthermore, it promises significant changes in the global economy, as it is produced from soybeans, whose prices are essential in international trade networks. 

As pointed out by the expert Gustavo Idígoras, president of the Oil Industry Chamber of the Republic of Argentina and the Center for Exporters of Cereals (Ciara-CEC), HVO fuel is part of “the strong policy of next-generation biofuels launched by the United States, which will replace fossil fuels and is based on renewable soybean oil.”

Biofuels have been the biggest bet of many global energy players, as they ensure efficiency in transport and are in line with the global environmental agenda regarding energy transition. 

The Use of HVO Will Have Strong Impacts on Soybean Export and Production and on the Prices of Derivative Products in the Global Market 

In addition to commenting on the biofuels policy and HVO, Gustavo Idígoras also highlighted that the use of fuel in the transport sector would have a particular impact on exports of the neighboring country, due to the threat of falling prices of soybean-derived products, which are essential for Argentina’s economy. He also noted that the United States is generating billions of dollars in investments for the development of the initiative. 

The director of Agritrend, Gustavo López, emphasized that in eight years the global consumption of biofuels in general grew by 72%, with biodiesel seeing a 53% increase compared to 487% for HVO.

The new fuel is also more profitable and efficient regarding prices and its use in replacing diesel, as it can be used 100%, without the need for blending, making it the perfect substitute for one of the largest pollutants in the global transport scenario today.

Finally, Ivo Sarjanovic, an investor and professor of agricultural commodities, reinforced the need for new investments in biofuels and stated that he sees HVO as the future of the global decarbonization market.