Brazil and the United States, the world's two top ethanol producers, announced the creation of an international forum to help turn biofuels into a globally traded commodity, just days before the two countries are expected to sign a separate agreement promoting the industry across the Western Hemisphere.
The launching of the Biofuels International Forum to which other large countries have adhered such as China, India, South Africa and the European Commission took place last Friday in the United Nations building in New York.
Brazilian ambassador to the UN, Antonio Patriota, said that the forum's objective was a platform for dialogue and exchange of experiences between producers and consumers of biofuels.
Similarly the forum will assess the economic and social benefits that the diversification of energy resource could represent particularly for developing countries besides reducing the risks of global warming.
"For developing countries biofuels will help reduce dependency on imported oil as well as save resources that can then be invested in health, education and other social fields," added Patriota.
Biofuels will also benefit highly industrialized countries since it will help to reduce contaminating gases, reduce the greenhouse effect and offer greater energy security faced with ever growing prices of oil.
"The idea is to prepare the ground for an international conference on biofuels scheduled to take place in Brazil in 2007," said ambassador Patriota.
The International Biofuel Forum will meet regularly for a year to draft global standards for biofuel production, find ways to open markets and encourage investment in countries with the potential to develop the industry, said officials.
"By working together we will be able to identify ways to help countries with agricultural potential become major energy suppliers," said Thomas A. Shannon, Assistant Secretary of State for Western Hemisphere Affairs.
"We think this is a huge step forward in the development of a new international understanding of energy."
The announcement comes hours before US President Bush travels to Brazil for talks in which renewable biofuels will top the agenda. Bush and Brazilian President Luiz Inácio Lula da Silva are expected to sign an agreement – separate from the international forum – to share scientific and technological research for an industry that has burgeoned in both countries.
"Biofuel cannot be promoted by just one country," Lula told journalists in Brazil. "It is a global issue."
Brazil is the world's biggest ethanol exporter, using sugar cane to produce it. A growing percentage of the Brazilian cars run on ethanol, which emits far less greenhouse gases than fossil fuels. In the United States, where farmers use corn to make ethanol, production surpasses that in Brazil.
Brazil's method of producing ethanol is better than the American way, Lula suggested, noting that sugarcane-based ethanol is far cheaper to make than corn-based ethanol, and warm-weather climates like Brazil are the only places where sugar cane thrives.
Neither country produces enough ethanol to meet growing domestic demand. And while countries from Asia to Europe are pursuing biofuels as a way to reduce dependency on oil imports, international trade of alternative fuels is minimal.