Sao Paulo, July 23: Brazil will soon start producing sugarcane-based bio-fuel, which will be used in commercial vehicles from 2011.
The sugarcane-based fuel will be produced in collaboration with an American biotech company and German auto giant Mercedes-Benz.
California-based Amyris Biotechnologies said large-scale commercial production of the bio-fuel will begin next year at a plant to be built in Sao Paulo with Grupo Sao Martinho, one of Brazil's largest sugar and ethanol producers.
Amyris and the Sao Paulo city administration have begun a pilot project in which three urban-transport buses will run for six months on a mixture of 10 percent sugarcane-based fuel and 90 percent commercial diesel. Another three buses in the pilot project will run on 100 percent ordinary diesel for the purpose of comparison.
Bio-fuel in Brazil has been derived from oil plants such as soy and African palm, but this is the first time that sugarcane-based fuel will be used.
Brazil is also a leader in production, use and export of sugarcane-based ethanol. Gasoline sold in Brazil contains 25 percent ethanol by government mandate, and vehicles that can run on gasoline, ethanol or any combination of the two have become very popular in recent times.
Mercedes-Benz will provide the bus engines and Brazilian energy giant Petrobras will handle the distribution of the sugarcane-derived fuel.
Sugarcane-based fuel has been found by US regulators to be less polluting and no threat to food production.