Brazil and the United States agreed Friday to forge a strategic alliance to promote the production and consumption of biofuels across the world.
A memorandum of understanding championing the alliance was inked by U.S. Secretary of State Condoleezza Rice and her Brazilian counterpart, Celso Amorim, in Sao Paolo.
U.S. President George W. Bush visited the largest city in South America at the start of his five-nation Latin American tour.
Under the MOU, Brazil and the United States will also address the issue of transferring biofuel technologies to other countries.
"We want to see biomass generating sustainable development, above all in South America, Central America, the Caribbean and Africa," Brazilian President Luiz Inacio Lula da Silva told reporters after touring an ethanol transport terminal.
"Brazil and the United States should create alliances with other countries to achieve global diversification of the production of biofuels. To that end, we must lay the basis for a global market of biofuels," he added.
Brazil and the United States are the world's largest ethanol producers, accounting for 70 percent of global production. The two countries want to standardize the definition of ethanol to make it a commodity on global markets, just like today's oil.
"This memorandum is our response to the greatest challenge of the 21st century ... Bush's visit may well mean a strategic alliance that will allow us to convince the world that we can change the energy plan," Lula said.
On March 2, an International Biofuel Forum was established, consisting of India, China, South Africa and the European Union, in addition to Brazil and the United States.
"This is how we will achieve the scale of production we need, to potentialize the benefits of ethanol and biodiesel," Lula said.
Bush said he was "particularly anxious" to work with Lula in helping Central America become "less dependent on oil" and "energy self-sufficient."
"It's in the interest of the United States that there is a prosperous neighborhood. And one way to help spread prosperity in Central America is for them to become energy producers ... not remain dependent on others for their energy sources," he said.
During Bush's stay in Brazil, the two countries each unveiled their own ambitious goals for developing biofuels in the near future.
Bush said his government had a goal of reducing gasoline consumption by 20 percent over 10 years.
"In other words, we have a mandated fuel standard of 35 billion gallons of alternative fuels to be used by 2017. That is now seven times more than the amount of alternative fuels we're using. Right now, we're using about 5 billion gallons of ethanol. I believe that the technologies will be such that America will be consuming 35 billion gallons of alternative fuels," he said.
Bush added that he had proposed, in his budget submitted to the Congress, an investment of 1.6 billion U.S. dollars over 10 years for additional research to ensure enough alternative fuel stocks to make ethanol.
Brazil produces ethanol fuel from sugar cane, but Lula said his country would try to diversify the sources for bio-energy.
"By 2010, Brazilian diesel, 5 percent of it will come from native abundant plants in our country, such as African palm, cottonseed, sunflower, castor beans, and many other seeds," Lula said.
Bush left Brazil on Friday afternoon for Uruguay to continue his Latin America tour, which also takes in Colombia, Guatemala and Mexico.
Analysts here say the United States wishes to enhance cooperation with Brazil in the area of ethanol fuel not only for economic reasons, but also for political reasons.
The United States intends to minimize its dependence on Venezuela's oil, which accounts for about 11 percent of U.S. oil imports, making the South American country the fourth largest supplier in the U.S. oil market.