U.S. and Brazil Sign Biofuels Cooperation Accord

SAO PAULO, Brazil, March 9, 2007 (ENS) - Brazil and the United States have announced a new partnership to boost research and production of ethanol and other biofuels.

The agreement, signed in Sao Paulo today, paves the way for increased research and common standards for biofuels to be commercialized in international markets. Together, the United States and Brazil account for 72 percent of global ethanol production.

President George W. Bush said Brazil has "showed what's possible" in terms of biofuels and said he appreciates the leadership of President Luiz Inácio Lula da Silva on this issue.

"There’s a lot we can do together. I appreciate so very much the idea of Brazil and America sharing research and development opportunities," said President Bush, following a tour of Petrobras' ethanol and biodiesel production at Transpetro Terminal outside Sao Paulo.

President George W. Bush and President Luiz Inácio Lula da Silva discuss biofuel technology during a joint press conference at Petrobras Transporte S.A. Facility (Photo by Paul Morse courtesy The White House)

President Lulu said that the new spirit of cooperation "may well mean a strategic alliance that will allow us to convince the world that everyone can change the energy blend."

"We who have polluted the world so much in the 20th century, need to make our contribution to de-polluting it in the 21st century," the Brazilian president said following the Petrobras tour.

In Brazil, ethanol fuel is produced from sugar cane residue known as bagasse. In the United States corn has been the main feedstock for ethanol production.

Most cars in Brazil run either on alcohol or on gasohol. Recently, flex fuel engines that run on both have become available. Gas stations sell both fuels.

The United States, potentially the largest market for the Brazilian ethanol, currently imposes trade restrictions on Brazilian ethanol in order to encourage U.S. domestic ethanol production. President Bush told a news conference in Sao Paulo that the tariff will remain in place at least until 2009.

Still, back in Washington the National Farmers Union said today that the renewable fuels agreement between Brazil and the United States could have a negative impact on family farmers, ranchers and American taxpayers. The partnership could allow foreign ethanol investors to receive U.S. tax subsidies to increase consumption and production of ethanol, while directly competing with U.S. production of ethanol.

Presidents Bush and Lula participate in a biofuel demonstration at the Petrobras Transporte S.A. Facility. With them, third from left, is Sergio Gabrielle, chief executive officer of Petrobas. (Photo by Paul Morse courtesy The White House)

China, India, South Africa, the United States and the European Commission have joined Brazil in the forum, which will convene over the next year to discuss ways to promote the sustained use and production of biofuels around the globe.

"Brazil has a successful ethanol program that's come out of over 30 years of very much work and technological innovation," said President Lula. "We are doing the same thing in our betting on biodiesel."

By 2010, Lula said, five percent of Brazilian diesel will come from abundant Brazilian plants such as "African palm, cottonseed, sunflower, castor beans, and many other seeds."

Lula said the Brazilian biodiesel program will help create jobs and income in the poorest regions of Brazil, especially in the northeastern semi-arid region, where many of these crops are native.

President Lula said today's agreement is not just an economic partnership between Brazil and the United States but will have wider ranging benefits. "A close relationship and cooperation between the two leaders in ethanol production will make it possible to democratize access to energy," he said. "The growing use of biofuel will be an inestimable contribution to the generation of income, social inclusion and reduction of poverty in many poor countries of the world."

Regionally, the two nations intend to help third countries, beginning in Central America and the Caribbean, to stimulate private investment for local production and consumption of biofuels.

The United States and Brazil expect to support feasibility studies and technical assistance in partnership with the Inter-American Development Bank, the United Nations Foundation, and the Organization of the American States.

"If we fund projects to produce biodiesel and ethanol in poorer countries, and then the richer countries buy biodiesel that's produced there, then we'll see that investments put into those countries have produced results, and even more important, generated jobs," President Lula said.

Multilaterally, the United States and Brazil intend to work through the International Biofuels Forum to examine development of common biofuels standards and codes to facilitate commoditization of biofuels.

Thousands of protesters made their anti-Bush views known in Sao Paulo on Thursday. (Photo courtesy Indymedia Brasil)

The confrontation left about 20 people wounded, between policemen, demonstrators and the press. Four protesters were arrested but released by night's end.

In his joint press conference with President Lula, President Bush addressed the issue of anti-American feeling briefly, saying he was glad to be in a country where dissent is tolerated.

Brazil was President Bush’s first stop in a seven day tour of Latin America that will take him to Uruguay, Colombia, Guatemala and Mexico. He and First Lady Laura Bush are now en route to Montevideo, Uruguay.