As part of the agreement, the company seeks to consolidate new production routes for second-generation biofuel-derived residues.

Petrobras noted that second-generation biofuels do not compete with food crops, since the raw material used is harvested waste that will otherwise be discarded. Additionally, this initiative also seeks for the long-term introduction of renewable fuels in the Brazilian energy matrix.

The Cenpes research center has been studying biomass processing to generate bio-oil from sugarcane straw residues since 2006. Bench tests have already been undertaken, and pilot plant studies are reportedly in progress. The first semi-industrial unit tests are scheduled for 2009.

Produced from raw materials such as sawdust, switch grass and, especially, sugarcane straw or bagasse, bio-oil is the product of the quick biomass pyrolysis process.