EU eyes Brazil’s biofuels skill

The EU and Brazil will be discussing ways of collaborating more closely on biofuels production and investment at a summit next month (4 July).

Both parties will be seeking to launch a dialogue on technology, trade and investment issues affecting the sector.

Brazil, which has been producing fuel from sugar-cane for motor vehicles since the mid-1980s, is a world leader in biofuel production. Collaboration with Brazil could help the EU to meet targets contained in this year’s energy package for increasing the share of biofuels used in transport to 10% by 2020.

"Brazil has a very important role in the biofuels sector," said a Portuguese diplomat. "We’d like to develop a dialogue and to exchange views." According to the diplomat, talks would focus on developing cost-effective and energy-efficient methods of production in Brazil and on future biofuels imports into the EU.

According to a Brazilian official, a planned line of credit for EU companies setting up projects in Brazil will concentrate mainly on the biofuels sector. The fund, established by the European Investment Bank and Brazil’s National Bank of Social and Economic Development, will be given the green light by the Brazilian government before the end of July. More than €37 million will be made available to EU companies.

The summit will give renewed attention to trade relations between the EU and Mercosur - the regional trade bloc comprising Brazil, Argentina, Paraguay and Uruguay. Negotiations were put on hold while the priority was launching world trade talks through the World Trade Organization. The EU and Brazil are leading players at the WTO but, with those talks now stalled, attention is reverting to regional agreements.

"The negotiations stopped two years ago. We have to revise the whole thing and begin again," said the Portuguese diplomat.

The EU and Brazil will be discussing ways of collaborating more closely on biofuels production and investment at a summit next month (4 July).