Under the agreement, the joint venture will make an initial investment of $30m to build a second generation bio-ethanol plant with a production capacity of 10 million liters.
In addition, the agreement also mandates the supply of feedstock to build the pilot plant for 20-year period.
Commenting on the alliance, TMO chief executive David Weaver stated that Brazil, among all the largest economical countries, has made a move to encourage flex engine cars that can run on 100% ethanol.
"Through 10 years of research and development TMO has created a market-leading process to convert waste to biofuels. We will now prove the effectiveness of our process by building the first plants of their kind to convert waste-to-ethanol at commercial volume," added Weaver.
The plant in São Paulo state will convert sugar cane waste to cellulosic bioethanol and is expected to commence operations from 2014.
