SAO PAULO, Dec 13 (Reuters) - Brazilian privately owned biodiesel producer Binatural aims to boost output by 20% annually until reaching 650 million liters in 2026, CEO Andre Lavor said in an interview on Wednesday, adding the firm will be required to expand capacity to meet demand.

Hoping the government will continue to raise the mandatory biodiesel mix, Lavor said the sector will need investment, potentially from foreign players also, to cater to demand for cleaner energy sources.

He said given the industry's robust growth projects, it should attract attention "and investments from all fronts."

Brazil could raise the biodiesel mix into diesel to 15% from 12% effective in 2024, depending on a meeting next week of the National Energy Council.

Lavor said he is "optimistic," noting the 15% threshold should have been implemented in 2023.

"A 1% addition in the biodiesel mix corresponds to about 1 billion liters more of consumption," he said.

A combination of higher sales volumes and better prices next year should boost Binatural's revenues by some 30% to 3 billion reais ($605 million), Lavor said.

Brazil, a farm powerhouse, produces about 70% of its biodiesel from soybeans, as the oilseed is abundant in the country.

Binatural's business model, however, dictates the firm's product is mainly produced from alternative sources, including animal fat and recycled cooking oil.

Brazil's biodiesel industry operates with average idle capacity of 50%.

Binatural, on the other hand, plans to outperform the industry and projects utilizing about 73% of its own next year, making a projected 440 million liters.

For now, Brazil's oilseed crusher lobby Abiove predicts roughly 7 billion liters of biodiesel production in 2023.

But if policy makers increase the mandatory mix to 25% by 2036, more investment would be needed as it would require Brazil to crush 50 million tons more of soy, he said.

Brazil's biodiesel industry could spur mergers or acquisitions too.

U.S.-based Cargill, for example, recently acquired Granol, a large soy crusher and biodiesel firm. Bunge and China's Cofco also make biodiesel in Brazil.

Binatural itself was courted by suitors for potential "partnerships," Lavor said declining to elaborate. He dismissed any "short-term plans" to close any deals.

($1 = 4.9557 reais)

https://www.reuters.com/markets/commodities/brazil-biodiesel-outlier-binatural-set-grow-bright-industry-outlook-says-ceo-2023-12-13/