Oil firms reveal green fuel deal

Oil giant Shell has announced it is to work with Brazilian fuel firm Cosan on a biofuel project.

The move will make Shell, a German firm, the biggest large-scale oil producer to deal in biofuels and the deal is reportedly worth around £8.19 billion.

After the agreement is complete, Shell will own half of one of Cosan's biofuel production plants which by 2014 is expected to be producing four billion litres of the fuel each year. Cosan uses sugar cane to make its biofuel and is the leading producer in Brazil.

However, many environmentalists are concerned over the impact that increased biofuel production could have on the endangered Amazon rainforest.

"Massively expanding sugar cane plantations to produce biofuels will significantly threaten Brazil's rainforest. The biofuels industry is pushing agricultural activity on to forested land where trees are cut down to make space for farming," anti-biofuel campaigner Kenneth Richter told the Guardian.

Written by Kimberley Homer.

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