Brazil hopes to team up with China in biofuel-media

Mon May 18, 2009 4:06am EDT
BEIJING, May 18 (Reuters) - Brazilian President Luiz Inacio Lula da Silva will focus on renewable fuels during his visit to Beijing this week, hoping to team up with China to develop bio-fuels, the Caijing Magazine has reported.
Lula arrived in Beijing on Monday and will pay a state visit for three days.
"We will focus on renewable fuels, especially ethanol and bio-diesel," Lula told Caijing in an interview on Friday when asked about his priorities for his state visit. The two developing countries already have strong trade ties.
"What we do want is for countries like China to establish partnerships with Brazil and Africa, for us to produce bio-fuels and generate more jobs and income," he was cited in a story posted on the magazine's website, www.caijing.com.cn.
Brazil has been promoting its ethanol technology to China, using sugarcane as feedstock. But given China's own shortage of sugar, China is not considering any sugarcane-based ethanol.
Brazil has also been proposing to export Brazilian-made fuel ethanol to China, but it now faces high import taxes as well as consumption taxes.
"If you don't have land to produce but you need energy, you can finance other countries that can produce to meet your market needs," Lula told Caijing.
Brazil is the only country in the world where nearly 90 percent of all cars sold are flex-fuel -- they can run on gasoline, 100 percent ethanol, or a blend.
Lula also said that it is possible that "another agreement between China Development Bank and Petrobras" will be signed during his visit, according to the English language Caijing story. It did not elaborate.
The China Development Bank signed a deal in February to extend a $10 billion credit line to Brazilian state-owned oil company Petrobras (PETR4.SA) (PBR.N) in exchange for 100,000 to 160,000 barrels per day of oil supplies to state firm China National Petroleum Corp and to Sinopec (0386.HK). (Reporting by Eadie Chen and Chen Aizhu; Editing by Ken Wills) (eadie.chen@reuters.com; +8610 6627 1268; Reuters Messaging: eadie.chen.reuters.com@reuters.net))