BRUSSELS (Reuters) - The European Union and Brazil will sign an agreement with Mozambique this week to develop bioelectricity and biofuels projects, officials said on Monday.
The agreement will be signed during a summit of European and Brazilian leaders in Brasilia on Wednesday, they said.
Spurred by surging EU biofuel demand and Brazil's production expansion goals, the deal with Mozambique is seen in Brussels and Brasilia as a first step toward greater cooperation on developing renewable energy projects in Africa.
Under the agreement, the EU and Brazil will start studies on how best to develop bioethanol, biodiesel and bioelectricity projects in Mozambique, which has become a leading African biofuels producer in recent years.
"This agreement will be part of the EU and Brazil's wider cooperation with Africa, which we hope will eventually lead to an agreement with the Africa Union," an EU official said.
The EU needs biofuel to meet its target of sourcing 20 percent of its energy needs from renewable sources by 2020.
Teaming up with global bioethanol leader Brazil would speed up the creation of a new and cheaper supply in Africa.
Unlike Brazilian bioethanol, which is subject to high import tariffs at EU borders, African-produced biofuel would be subject to minimal tariffs.
New production bases in Africa could benefit Brazilian biofuel producers such as Cosan and ethanol and sugarcane group Copersucar, Brazilian diplomats said.
Such companies would still need the EU's stamp of approval to ensure African-made biofuel meets strict European rules designed to protect the environment.
EU officials are unsure about how long feasibility studies on Mozambique will take to complete, or how soon they could spawn bioenergy projects. Brazil has completed similar feasibility studies with the United States for bioenergy projects in Haiti, the Dominican Republic and Central America.
Despite the EU's commitment to increasing use of biofuels over the next decade, concerns are rising about the impact such a policy could have on the environment and food security, with some research showing biofuels may end up causing more harm than good to the environment.