Brazil's Grupo Potencial announced on Tuesday an investment of 600 million reais ($108.86 million) to increase biodiesel output at one of its plants, giving the facility the world's largest production capacity for soy oil-based biofuel.

WHY IT'S IMPORTANT

The investment was announced amid efforts by Brazil's government to increase the footprint of biofuels in local markets.

President Luiz Inacio Lula da Silva is slated to sign a bill known as Fuel of the Future into law on Tuesday to promote the gradual increase of biodiesel blend into diesel, among other actions.

BY THE NUMBERS

Grupo Potencial said the plant, located in Parana state, will increase its annual biodiesel production capacity to 1.62 billion liters (428 million gallons) from 900 million liters (238 million gallons).

The plant's current capacity already makes it the largest unit in Brazil, according to Potencial. Expansion work is scheduled to begin in 2025, with completion scheduled for 2026.

The company believes the additional production will meet market demand as the new law is expected to increase the biodiesel blend with diesel to 25% by 2035, from the current 14%.

KEY QUOTES

"The energy transition is an irreversible global movement," Grupo Potencial head Arnoldo Hammerschmidt said in a statement on Tuesday.

"Our country is making significant progress towards ensuring legal security, predictability of investments in the sector and, consequently, stability in our energy mix."

($1 = 5.5116 reais)