Page last updated at 05:54 GMT, Wednesday, 18 April 2007 06:54 UK

Brazil in ethanol production vow

Presidents Chavez (left) and Lula da Silva
Ethanol still divides the two allies

Brazil has vowed to increase its production of ethanol, defying calls from Venezuelan president Hugo Chavez to scale back its output.

At the end of an energy summit of South American nations, Brazil said it could double output in the next 10 years.

Mr Chavez has expressed concern about Brazil's tie-up with the US to jointly promote ethanol as an alternative fuel.

Mr Chavez said he was not opposed to biofuels as such although he disliked fuel produced from corn in the US.

'Way out'

Brazil produces the bulk of its ethanol from sugar cane, a practice which Mr Chavez has previously criticised claiming it uses up valuable land and contributes to rural poverty.

But Mr Chavez appeared to tone down criticism of his neighbour at the two-day meeting in Venezuela, focusing instead on US production methods.

Venezuela has said it will buy 200,000 barrels of ethanol a day from Brazil for use in fuel additives.

Brazil said it could potentially increase production by up to 10% a year and would lobby for the US to reduce tariffs on its imports.

"The truth is that biofuel is a way out for the poor countries of the world," said its President Luiz Inacio Lula da Silva.

Concluding their meeting, Brazil, Venezuela and eight other countries agreed to fund joint infrastructure projects and boost co-operation between state energy companies



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